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LONDON - The United Kingdom Debt Management Office (DMO) conducted an auction of £1.5 billion of 5⅜% Treasury Gilt 2056 on Tuesday, with strong demand resulting in the offering being oversubscribed by more than three times.
The auction saw bids totaling £4.601 billion for the long-dated government bond, creating a coverage ratio of 3.07 times the amount offered, according to a DMO statement.
The gilt, which carries an ISIN code of GB00BT7J0241, was sold at prices ranging from £98.301 to £98.634, corresponding to yields between 5.490% and 5.467%. The average accepted price was £98.506, equivalent to a yield of 5.476%.
Competitive bids at prices above the lowest accepted price received full allocation, while those at the lowest accepted price were allotted 4% of the amount bid. All bids below the lowest accepted price were rejected.
Of the total amount, £1.275 billion was allocated to competitive bids, while £225 million went to non-competitive bids from gilt-edged market makers. No non-competitive bids from other participants were reported.
The auction featured a tail of 1.4 basis points, calculated as the difference between the yield at the lowest accepted price and the yield at the average accepted price.
The DMO also announced that an additional amount of the stock totaling up to £375 million will be made available to successful bidders for purchase at the non-competitive allotment price, as outlined in the Information Memorandum.
Stock allotted to members of CREST will be credited to their accounts through member-to-member deliveries on the relevant settlement date.
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