The UK has made a bit of unwanted history on Tuesday morning, becoming the first fully fledged triple-A nation since 2005 forced to sell its debt through a group of banks.
Barclays, Goldman Sachs, HSBC and RBS are hawking £3-5bn of a 25-year 4.5 per cent gilt round the market. The yield is around 12 to 15 basis points over the existing June 2032 gilt and in the view of traders pretty generous.
However, that’s probably not surprising. The Debt Management Office needs this to go well; it is the first of eight syndicated deals pencilled in for 2009.
Overall, the UK is planning to issue a record £220bn in bonds this financial year and faced with that tsunami of paper it is probably not surprising the DMO has turned to the big investment banks to, ahem, broaden its investors base.
Updates when available.
10.59am.RTRS-UK 25-YR SYNDICATED GILT REVISED TO PRICE 11 TO 12 BPS OVER JUNE 2032 GILT – LEAD
RTRS-ORDERS FOR UK 25-YR SYNDICATED GILTS OVER 10 BLN STG, BOOKS TO CLOSE AT 1015 GMT – LEAD.
13.11.
LONDON, June 16 (Reuters) – Britain made its first foray into the syndicated bond market in four years on Tuesday, raising a larger-than-expected 7 billion pounds via the sale of 25-year bonds.
16.07.
LONDON, June 16 (Reuters) – Britain’s Debt Management Office said on Tuesday its 7 billion pound 25-year gilt had been priced via the bookrunners at a re-offer price of 97.850. It said that was equivalent to a yield of 4.646 percent and a spread of 11 basis points over the existing 4.25 percent gilt maturing 2032.
16:12.
RTRS-UK DMO’S STHEEMAN SAYS RESULT OF SYNDICATED GILT IS “VERY GOOD”
RTRS-UK DMO’S STHEEMAN SAYS RAISED SIZE TO 7 BLN STG DUE TO STRENGTH, DIVERSITY OF DEMAND
RTRS-UK DMO’S STHEEMAN SAYS SIZE, TIGHT PRICING ACHIEVED REFLECTS WELL ON DEPTH AND MATURITY OF GILT MKT
Related link:
UK to sell debt through rare syndication – FT