#2: The 1.25% Oct-41 gilt......>

GILT AUCTION PREVIEW: #2: The 1.25% Oct-41 gilt will also be on offer for

GBP2.25bln, rounding off issuance for the week.

- The gilt was first launched in January via auction and has already seen two

further auctions in the current fiscal year. All auctions have seen pretty tight

tails of 0.2-0.3bp and bid-to-cover ratios of 2.16x-2.56x. We note that the

higher bid-to-cover ratio was achieved on a slightly smaller auction size of

GBP2.00bln and bids have therefore always been consistent around the GBP5bln

mark. At the time of writing, yields are a little higher than at the last

auction (15 May) which achieved an average yield of 0.594%. The gilt is

scheduled to be auctioned again on 7 July.

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

11:30BST with a further GBP562.5mln nominal available through the PAOF to

successful bidders.