UK Debt Management Office UK Regulatory Announcement: Debt problem


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May 25, 2021



The UK Debt Management Office (DMO) announces that the syndicated launch of £ 4.0bn (nominal) of 0⅛% 2039 T-bills has been valued at £ 152.293 per £ 100 nominal, which is equivalent to an actual gross redemption yield of -2.2448%. The transaction will be settled and the first tranche of this gilding will be issued on May 26, 2021.

Proceeds from today’s deal are expected to be around £ 6.1bn (cash1) and will bring indexed gilding sales to £ 8.9 billion and syndication sales to £ 12.0 billion to date. Total sales of gilding in 2021-2022 stand at £ 49.8 billion. The DMO plans to raise £ 252.6 billion through gilding sales in 2021-2022.

This was the second of five deals currently scheduled in DMO’s 2021-22 syndication program2 (excluding green gilts which could be emitted via this method). The new gilt was valued at a yield spread of 0.5 basis point (bps) below the yield of the benchmark gilt, 0⅝% Index-linked Treasury Gilt 2040. This represented the tight end of the published price forecast. The UK domestic market provided the main support for the issue, taking around 91% of the allocation.

Commenting on the result, Sir Robert Stheeman, Managing Director of DMO, said:

Today saw the very successful launch of our new indexed gilding due 2039. The new gilding was extremely well received by the market and generated strong and high quality interest from real money national accounts which constitute our national investor base.

We were thus able to bring the new gilding to the market in a significant size that will allow it to reach benchmark status relatively quickly. Indeed, today we have witnessed the largest indexed gold offering event (in nominal terms) since July 2014 and this transaction also represents the largest index syndication ever carried out in terms of cash.

I am very pleased with the market response to today’s transaction and the efficiency with which it was executed. Today’s sale once again demonstrated the continued strength and depth of the gilding market in general, and the indexed sector in particular, and the valuable support we receive from its participants for our fundraising programs.


The syndicated offer was managed by four Joint Bookrunners: HSBC, JP Morgan, Morgan Stanley and Nomura. All of the other Golden Slice Wholesale Index Market Makers were co-leaders. The composition of the union was announced by the OGD on May 14, 2021.

The order book for the transaction was opened at 9:00 a.m. on May 25, 2021 with indicative price indications for investors with a flat spread 0.5bp below the yield of the benchmark gilt (0⅛% Index-linked Treasury Gilt 2040). At 9.45am, the Joint Bookrunners announced that the price forecast was set at a yield spread of 0.5bp below the benchmark gilt. The book closed at 10:00 am with 102 orders.3

At 10:35 a.m., the Joint Bookrunners announced that the deal size had been set at £ 4.0 billion (nominal). The price was set at 1:01 p.m.

£ 1.0bn was transferred from the unallocated portion of the gilt issuance to the indexed syndication program, increasing the size of this program to £ 10.0bn. The amount of the remaining unallocated amount was therefore reduced to £ 24.5 billion.

The WCO will release an update to its plans for the syndication program in 2021-22 in the announcement of the July-September 2021 gilt schedule of operations at 7:30 a.m. on May 28, 2021.

This press advisory will appear on the DMO website at the following address:

1 Unless otherwise indicated, the figures in this press advisory are in cash.

2 During the mandate review of April 23, 2021, a previously scheduled indexed syndication was canceled and replaced by an indexed auction: there are currently three conventional long syndications and two indexed scheduled in 2021-2022, aiming to raise £ 16.5 . and 9.0 billion pounds respectively.

3 Total orders amounted to £ 29.0 billion (face value).

Category code: IOD

Sequence number: 738010

Reception time (offset from UTC): 20210525T153405 + 0100

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