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

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps Stg600mln of the
I/L Gilt 0.125% Gilt 2056 on Tuesday. 
- BACKGROUND: The DMO currently does one linker tap per month and the Stg600mln
being sold is a about an average size and is equivalent to around GBP4.6mln/bp,
assuming a yield beta of one. This is an RPI linked security. The Bank of
England buys 15Y+ Gilts in the afternoon. 
- RV: This is a typical pension fund investment and has cheapened up
considerably in the past weeks/months. Indeed, the breakevens for long dated
linkers are at their lowest since August last year. Stronger sterling, threat of
BoE rate hike in May and lower global breakevens have been behind this move.
This security has not been sold for some time. Last November the DMO sold
Stg400mln of Gilt 4% 2060 at a yield of 1.63%, a cover of 2.2x.
- RESULTS: Auction results are due at around 1035GMT

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