UK gets near-record £73b demand for new 30-year bond

[LONDON] Britain sold £9 billion (S$15.89 billion) of a new 30-year government bond on Tuesday, part of the government's surge in borrowing to pay for its response to the coronavirus crisis.

Demand from investors was not far off the record £84 billion in orders last month for a 10-year gilt, with £72.80 billion of orders placed in the space of an hour.

The October 2050 gilt, which pays a coupon of 0.625 per cent, was priced to yield 0.5 basis points more than the current 30-year benchmark gilt.

Barclays, Goldman Sachs, JP Morgan, Nomura and Santander acted as joint leads on the transaction.

The UK Debt Management Office (DMO) said the issue was priced at 96.343, equating to a gross redemption yield of 0.7601 per cent.

The sale - the third syndication of the 2020/21 financial year - took gilt proceeds in the financial year to date to £143 billion, approaching the £225 billion the DMO is aiming to raise between April and July.

British domestic investors accounted for 91 per cent of the allocation.

"The robust market response to today's sale, which has enabled us to launch our new 30-year gilt in very substantial size, should serve to benefit the bond's liquidity as we build it up further to establish its status as our new 30-year benchmark gilt," DMO chief executive Robert Stheeman said.



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