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

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