Today sees the first medium-dated.............>

GILTS: Today sees the first medium-dated conventional gilt syndication from the

DMO as it launches a new 10-year 0.375% Oct-30 gilt.

- The size of the syndication will be closely watched and may set a precedent

for the DMO to launch 10-year gilts like via syndication in the future if

successful. We expect demand to be strong and would not be surprised to see

GBP5-6bln issued. We would not rule out a larger size, however, and note the

large syndications see in Spain and Italy recently. On April 22 Spain launched a

10-year with a volume of EUR15bln while on April 21 Italy's dual tranche

syndication saw EUR10bln 5-year and EUR7bln of 30-year BTPs issued.