LONDON - The UK Debt Management Office (DMO) successfully auctioned £2.25 billion of 4⅜% Treasury Gilt due in 2054, indicating strong investor demand as the bid-to-cover ratio reached 2.75 times. The auction, which took place on Tuesday, saw competitive bids that exceeded the lowest accepted price fully allotted, while those below were rejected.
The highest accepted price for the gilts was £87.691, corresponding to a yield of 5.194%, and the lowest accepted price was £87.594, with a yield of 5.201%. The non-competitive allotment price, representing the rounded average accepted price, was set at £87.640, yielding 5.198%.
A total of £1,912.499 million was allotted to competitive bids, with gilt-edged market makers receiving £337.500 million and a nominal amount of £0.001 million allotted to others. The DMO also made an additional amount of the stock totaling up to £562.500 million available to successful bidders at the non-competitive allotment price, following the terms of the Information Memorandum.
The gilts will be credited to members of CREST by member-to-member deliveries on the designated settlement date. The auction’s "tail," the difference in yield between the lowest accepted and average accepted prices, was calculated as 0.3 basis points, highlighting the narrow spread between the highest and lowest bids accepted.
This news is based on a press release statement from the UK Debt Management Office. The successful auction reflects the ongoing market appetite for UK government securities, as investors continue to engage with long-term debt instruments. The DMO’s management of the auction process ensures that the UK government’s financing needs are met efficiently.
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