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LONDON - The United Kingdom (TADAWUL:4280) Debt Management Office (DMO) conducted a successful auction of £5 billion of 4⅜% Treasury Gilt 2028 on Tuesday, with demand significantly exceeding the amount offered.
The auction saw bids totaling £18.53 billion, resulting in a coverage ratio of 3.71 times the amount available, according to a DMO statement. The gilt, which matures in 2028, was sold at prices ranging from £101.057 to £101.067, corresponding to yields between 3.943% and 3.939%.
Competitive bids at the lowest accepted price received a partial allotment of 12.8129% of the amount bid for, while bids above this price were allotted in full. The non-competitive allotment price, calculated as the rounded average accepted price, was set at £101.062, equivalent to a yield of 3.941%.
Of the total amount, £4.25 billion was allocated to competitive bids, while £750 million went to gilt-edged market makers through non-competitive bids. An additional amount of up to £1.25 billion will be made available to successful bidders for purchase at the non-competitive allotment price.
The auction’s "tail" - the difference between the yield at the lowest accepted price and the yield at the average accepted price - was 0.2 basis points, indicating relatively tight pricing.
The gilt (ISIN Code:GB00BSQNRC93) will be credited to successful bidders’ CREST accounts through member-to-member deliveries on the relevant settlement date.
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