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

GILT AUCTION PREVIEW
GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) taps 30-yr 0.125%
Aug-48 IL Gilt for Stg750mln on Tuesday. 
- BACKGROUND: The DMO currently does one linker tap per month and the Stg750mln
being sold is a about an average size and is equivalent to around GBP3.6mln/bp.
This will be the first auction of this Il Gilt having been launch and then
tapped via syndication. 
- RV: The IL48 real yield appears to be slightly cheap when compared to other
real yields in the 25-35Y sector. However, the demand appears strong in the
sector according to reports from the market. Real yields are -1.397%, which is
around 25bp higher than at the beginning of April and close to all time of of
-1.342%. Barclays says that Il Gilt does not offer "particularly interesting
value" but adds that IL issuance from DMO is notably smaller this quarter and
should "ensure reasonable reception". 
- HISTORY: At the last 2048 index-linked syndication, Stg2.75bln was allotted at
a spread of UKTi 0.75% 11/47 +0.8bps. Spread is currently 0.9bps.
- RESULTS: Auction results are due at around 0935GMT

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