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DMO Consultation Minutes: Longs

GILTS
  • There are 6 remaining long auctions (1 already announced, 1 additional on 13 December, 4 in FQ4) with GBP12.9bln still due to be raised (GBP30.5bln target).
  • 4.75% Oct-43 gilt: MNI expects a first reopening in FQ4. This was recommended by GEMMs and investors (while some investors suggested 2 re-openings). For the additional auction, some GEMMs recommended a reopening while investors were split between this and the 3.75% Oct-53 gilt.
  • 3.75% Oct-53 gilt: This was GEMMs' most popular choice for the additional auction while, as noted above, investors were split between this and the 4.75% Oct-43. There was also support for a reopening in FQ4 (despite the launch of the new 30-year gilt via syndication). MNI expects this gilt will be reopened in the additional auction but thinks that we will not see it reopened in FQ4 (unless it is early in January ahead of the syndication).
  • New 30-year gilt: There was support from both GEMMs and investors for the first new auction of the new 30-year gilt (that is supported for the syndication).
  • 1.50% Jul-53 Green: MNI looks for one reopening - this was supported by both GEMMs and investors.
  • 4.00% Oct-63: There is support for reopenings from both investors and GEMMs. MNI notes that we have not seen a gilt with a residual maturity of 31 years or greater sold via auction in this fiscal year to date. Since the end of 2021 the only gilt of this maturity on offer has been the 0.50% Oct-61 gilt – although we do note that the 1.125% Oct-73 gilt was offered via tender in September. We see a good chance that if the 4.00% Oct-63 gilt is not reopened via auction that it would be reopened via tender in the quarter.
  • FQ4 auction dates: 09-Jan, 06-Feb, 20-Feb, 05-Mar
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