The UK Debt Management Office’s auction of £500m worth of 2037 index-lined bonds appears to have been a major success on Thursday.
As Dow Jones reports:
LONDON (Dow Jones)–The U.K. government’s latest index-linked gilt auction attracted strong demand Thursday, data from the U.K. Debt Management Office showed. The GBP500.0 million “mini-tender” of the 1.125% November 2037 index-linked gilt resulted in a bid-to-cover ratio, a gauge of demand, of 3.37, up from 1.24 at the previous auction of this bond held Feb. 24. The real yield fell to 0.816% from 1.136% at the previous auction. The mini-tender was conducted on a single-price basis with no non-competitive bidding facility, and offered no post-auction option facility. The real striking price was 107.81.
In case you missed that, the auction’s bid-to-cover ratio was 3.37. That compares to a ratio of 1.24 back in February.
Index-linked bonds, which are tied to RPI prices and therefore inflation, are clearly all the rage.
Related links:
No rest for the DMO – FT Alphaville