#2: GBP1.50bln of the 1.75%....>

GILT AUCTION PREVIEW: #2: GBP1.50bln of the 1.75% Jul-57 gilt will also be on

offer on Wednesday.

- This is the second time the gilt has been sold so far in this fiscal year with

the last auction on 8 April for GBP1.25bln which saw a healthy bid-to-cover

ratio of 3.13x and a tight tail of 0.2bp. In addition, the full 25% extra

allocation was taken up in the PAOF. Since then, we have seen two auctions of

the 1.75% Jan-49 gilt and two auctions of the 1.625% Oct-54 gilt, all of which

have had bid-to-cover ratios in the 2.3-2.6x area with tight tails of 0.1-0.2bp.

Furthermore, last week saw the syndication launch of the 0.50% Oct-1 gilt with

orderbooks of GBP53.1bln and a size of GBP7.0bln issued. Demand is clearly still

strong for 30+ year gilts so we expect another successful auction.

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

11:30BST with a further GBP375mln nominal available through the PAOF to

successful bidders.