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Investing.com -- The UK’s Debt Management Office (DMO) is seemingly set to continue its trend of issuing shorter-maturity bonds, leveraging the investor enthusiasm that led to a record-breaking sale of 10-year notes this week.
Jessica Pulay, the Chief Executive of the DMO, indicated in an interview that she identifies a “sweet spot” for offerings that fall between the commonly accepted definitions of short and long maturities. This follows the DMO’s decision to increase the size of the new debt sale maturing in 2035 to a record £13 billion ($16.2 billion) on Tuesday through banks. This increase was made possible due to the exceptional quality of the largest orderbook the DMO has ever seen, according to Pulay.
Pulay pointed out the unique appeal of the 10-year bond, stating, “Clearly the 10-year bond is the maturity which is the sweet spot for the market and therefore is able to appeal to the widest possible universe.” She emphasized that the quality of the orderbook is the ultimate determinant of the transaction size.
She further hinted at a continued focus on this "sweet spot" in the future, stating, “So you can see the direction of travel over time.” However, she also noted that not all long-term bonds hold the same value, adding, “Not all longs are created equal.”
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