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REPEAT: GILT AUCTION PREVIEW: The UK Debt............>

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: REPEAT: The UK Debt Management Office will tap the market
for Stg2.25bln on Tuesday. On offer is the 1.75% Jan-49 gilt.
BACKGROUND: This is the fourth auction of the issue and it is currently being
built up as the 30-year benchmark. With the total amount outstanding rising to
Stg8.5-9bln after tomorrow's auction and PAOF, we believe the Jan-49 gilt will
start to be seen as the 30-year benchmark imminently. It will be tapped again on
13 August.
- RV/HISTORY: The Jan-2049 gilt is trading in line with the current 30-year
benchmark, the July-2047 gilt. Yields have fallen by around 30bp since the
Jan-49 gilt was last tapped, although yields have fallen more in shorter
maturities as the 10s30s curve has steepened. The last two Jan-49 auctions have
seen a bid-to-cover in the 2.3x-2.4x range with a tail of 0.4bps.
- TIMING: Results are due shortly after the auction closes at 10:30BST with the
PAOF available to successful bidders until 14:00BST.

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