The U.K. Debt Management Office sold an additional 2.25 billion pounds ($2.96 billion) of its 1.25% July 2027 gilt on Tuesday, pushing the total size to more than 13 billion pounds.
The yield was struck at 1.267%, around 12 basis points lower than this gilt's last re-opening in early July, which coincided with a broad sell-off in European government bonds after European Central Bank President Mario Draghi's speech in Sintra, Portugal.
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Tuesday's auction was 2.56 times oversubscribed.
The July 2027 issue was launched only this March, but a series of re-openings in April, June and July have bulked up its size.
The next re-opening is scheduled for Sep. 13, around the time the Bank of England will be reinvesting proceeds from maturing gilts it holds under its bond-buying program.
RBC Capital Markets analysts don't expect much direct support for the September auction, as they calculate that the 1.25% 2027 gilt will be ineligible for BOE purchases during two of the reinvestment period's expected three weeks.
Until then, the DMO will be offering more of the 0.125% 2026 inflation-linked gilt and the conventional July 2023-maturing bond in August.
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(END) Dow Jones Newswires
August 01, 2017 06:35 ET (10:35 GMT)