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LONDON - The United Kingdom Debt Management Office (DMO) completed an auction of £5 billion of 4⅜% Treasury Gilt 2028 on Wednesday, with strong demand resulting in the offering being oversubscribed by more than three times.
The auction saw bids totaling £15.79 billion for the debt offering, representing a coverage ratio of 3.16 times the amount on offer, according to a DMO press release statement.
The government accepted bids within a narrow price range, with the highest accepted price at £100.918 (yielding 3.989%) and the lowest accepted price at £100.908 (yielding 3.993%). Bids at the lowest accepted price were allotted 9.1743% of the amount requested, while competitive bids above this threshold were fulfilled in full.
The non-competitive allotment price, calculated as the rounded average of accepted prices, was set at £100.913, corresponding to a yield of 3.991%.
Of the total amount, £4.25 billion was allocated to competitive bids, while £750 million was designated for gilt-edged market makers through non-competitive bids. A minimal amount of £0.003 million was allocated to other non-competitive bidders.
The DMO also announced that an additional amount of up to £1.25 billion of the same gilt will be made available to successful bidders for purchase at the non-competitive allotment price, in accordance with terms outlined in the Information Memorandum.
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 consistent pricing among successful bids.
Stock allotted to members of CREST will be credited to their accounts via member-to-member deliveries on the relevant settlement date.
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