Today the DMO will tap the.....>

GILT AUCTION PREVIEW: Today the DMO will tap the 1.75% Sep-37 conventional gilt

with Stg2,250mln nominal on offer at the auction and an additional Stg375mln

available through the PAOF.

BACKGROUND: This is the benchmark 20-year gilt and this will be the issue's

twelfth auction, increasing the total amount outstanding to just shy of

Stg24bln. On a relative value basis the Sep-37 appears to trade at a discount to

other gilts with similar maturities but this discount is largely explained by

its  coupon. Every other gilt with a maturity within six years of the Sep-37 has

a coupon of 4.25% or higher.

- This gilt was last tapped on April 16 when Stg2,250mln was bought at an

average yield of 1.65% and a bid-to-cover of 2.3 with a tight tail of 0.2.

TIMING: Results are due shortly after the auction closes at 10:30BST with the

PAOF available to successful bidders until 14:00BST.