#1: The 0.125% Jan-28 gilt.....>

GILT AUCTION PREVIEW: #1: The 0.125% Jan-28 gilt will be on offer for GBP3.0bln

this morning.

- This will be the third auction of the gilt which launched in June. Tails at

both the launch auction and the first reopening were fairly wide at 0.7bp and

0.6bp respectively while the bid-to-covers were 2.06x and 1.84x. Both tails and

bid-to-covers have been notably weaker than for the new 5-year and 10-year gilts

launched over the past couple of months (the 0.125% Jan-26 and 0.375% Oct-30).

The first auction of the gilt saw almost the entire PAOF taken up but the second

auction saw the PAOF completely unused. Despite being launched only last month,

the BOE already own almost half of the outstanding volume of the gilt. In

addition to this morning's auction, the gilt is scheduled to be sold again on 12

August.

RESULTS: Results will be announced shortly after the auction closes at 10:00BST

with a further GBP750mln available to successful bidders via the PAOF.