The 4.75% Oct-54 gilt is due to be sold....>

ISSUANCE: The 4.75% Oct-54 gilt is due to be sold at syndication this week.

Historically, syndications generally occur on Tuesdays with books opening at

9:00BST.

- The gilt was launched by syndicated sale earlier this year on 14 May with

Stg4.75bln nominal sold. Demand was strong with the offering priced at a yield

spread of 0.25bp below the 3.75% Jul-52. This spread at the time of writing had

moved the other way and at the time of writing was trading at a yield spread of

0.12bp above the 3.75% Jul-52.

- Strong demand continues at the long-end, particularly from domestic pension

funds, with domestic accounts taking around 86% of the launch transaction.

- We would expect a minimum transaction size of Stg3.75bln nominal with the

potential to increase the size to Stg4.0bln nominal. Note that the price of the

issue has increased by over 15% since it was launched.

- The DMO's original target was to raise Stg13.0bln through conventional

syndication. This was raised to Stg13.4bln after Stg4.8bln was raised in May.

- Bookrunners: Barclays, BofA Merrill Lynch, Lloyds, Morgan Stanley