#2: The launch of the 0.125%...>

GILT AUCTION PREVIEW: #2: The launch of the 0.125% Jan-28 gilt will the final

gilt auction this week with GBP3.25bln on offer.

- This will be the second time this week the DMO has launched a new gilt

following the launch of the 0.625% Oct-50 gilt for GBP9.0bln via syndication on

Tuesday. This will be the first 7-year gilt launch by the DMO in recent times.

The closest comparable gilt to be recently auctioned was the 1.25% Jul-27 gilt

which saw a bid-to-cover of 2.21x and a tail of 0.3bp. We note that for a gilt

to be eligible for the BoE's APF facility at least GBP4.00bln need to be in

issue so unless close to the full 25% PAOF is taken up, the 0.125% Jan-28 gilt

will not be eligible until it is reopened. The 0.125% Jan-28 gilt will be

available for auction again on 1 July and 22 July.

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

11:30BST with a further GBP812.5mln nominal available through the PAOF to

successful bidders.