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

GILT AUCTION PREVIEW: The UK Debt Management Office will tap the market for

Stg.2.25bln on Tuesday. On offer is the 1.75% Sep-37 Gilt.

- BACKGROUND: The 1.75% Sep-37 Gilt is the 20-year benchmark and was last tapped

on January 22 with Stg1.75bln allotted at an average yield of 1.766% and

bid-to-cover ratio of 2.28x.

- RV/HISTORY: Following last week's Article 50 extension, gilts have sold off

sharply with yields ~10bp higher. The longer-end has marginally underperformed,

causing the curve to steepen slightly. The 1.75% Sep-37 Gilt trades at a yield

of 1.669%, up from a recent low of 1.411% on March 25 and 11.8bp outside the

comparable GBP swap. With the imminent risk of a no-deal Brexit taken off the

table and short positioning in the pound unwinding, the backdrop for this week's

gilt auction has turned relatively more favourable.

- TIMING: Results are due shortly after the auction closes at 1030BST.