The UK Debt Management.........>

GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps Stg1.0bln of the

I/L Gilt 0.125% Gilt 2026 on Tuesday. 

- BACKGROUND: The DMO currently does one linker tap per month and the Stg1.0bln

being sold is a fairly normal size. There are Stg0.1bn of gilt linker coupons

available for reinvestment this week. 

- RV: The past month has seen the real yield of the I/L 2026 rise from a low of

-1.90% to -1.79%, yet this higher level is far from generous on the basis of

where it traded in 2017. The real yield curve is looking quite flat with a 14bp

spread to the UKTI 0.125% Mar-24. Breakevens have been fairly directionless in

this section of the yield curve. 

- HISTORY: At the last tap of this 2026 I/L Gilt issue on Nov 21, the DMO

allotted Stg1.0bln at an average yield of -1.853% and a bid-to-cover ratio of

2.99 times. 

- RESULTS: Auction results are due at around 1035GMT.