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LONDON - The UK Debt Management Office (DMO) successfully auctioned £3.25 billion of 4⅜% Treasury Gilt due in 2040, with competitive bids totaling £9.388 billion, indicating a coverage ratio of 2.89 times.
The auction, which concluded recently, had its highest accepted bid at a price of £95.215 and a corresponding yield of 4.828%. The lowest accepted bid came in at £95.080 with a yield of 4.842%, resulting in a tail of 0.6 basis points, which is the difference in yield between the lowest and average accepted bids.
Non-competitive bids, typically from gilt-edged market makers, were allotted at the average accepted price of £95.141, yielding 4.836%. These market makers were allocated £487.5 million of the gilts, while no amount was allocated to other non-competitive bidders.
Furthermore, an additional amount of the gilt totaling up to £812.5 million will be available for purchase at the non-competitive allotment price for successful bidders, as per the terms set out in the Information Memorandum.
The DMO has stated that the stock allotted to members of CREST, the UK’s securities settlement system, will be credited to their accounts on the designated settlement date.
This recent debt issuance is part of the UK government’s ongoing efforts to manage its borrowing needs and to maintain an orderly gilt market. The information provided here is based on a press release statement from the UK Debt Management Office.
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