#1: The 0.125% Jan-23 gilt.....>

GILT AUCTION PREVIEW: #1: The 0.125% Jan-23 gilt will be on offer for the fourth

time this morning.

- In line with the previous two auctions of the issue, GBP3.75bln will be on

offer. At the time of writing, prevailing yields on the gilt were positive, but

most other gilts out to the 5-year area see negative yields. At present it is

looking unlikely but there is a chance we could well see the fourth ever

negative yielding gilt auction. Bid-to-covers for this gilt have fallen

gradually over the three auctions so far. At launch it saw 3.05x, on 6 May 2.59x

and on 27 May 2.32x (although we do note that the first auction was the smaller

size of GBP3.25bln). Tails at the auctions have been 0.6bp, 0.3bp and 0.4bp

respectively. We also note that as the gilt has a maturity of less than three

years, it is not eligible to be purchase by the BoE for its APF scheme. The gilt

will be on offer once more on 7 July.

RESULTS: Auction results will be released shortly after the auction closes at

10:00BST with a further GBP937.5mln nominal available through the PAOF to

successful bidders.