UK Sells Record £13 Billion of 10-Year Bonds Amidst High Investor Demand
The United Kingdom has sold a record £13 billion ($16 billion) of 10-year bonds, driven by strong investor demand eager to secure yields amid rising rates.
Syndication Sale Attracts Over £140 Billion in Orders
The government received orders exceeding £140 billion for the new debt, sold through banks in a syndicated sale. This demand surpasses the previous record set less than a month ago.
Investors Embrace Current Yield Levels
Despite concerns about fiscal health and excess supply earlier this year, the sale indicates investors' appetite to capitalize on current yield levels as the Bank of England remains dovish in its interest rate stance.
Pricing Set Below Initial Range
The pricing for the bond issue was set at 5.5 basis points above comparable bonds, tighter than an earlier range of 5.5 to 6 basis points.
Implications for Future Gilt Issuance
The sale's size, which exceeded market expectations, has significant implications for future gilt issuance. The remaining scheduled medium-maturity auctions are likely to be reduced by approximately £1 billion, providing support for gilt outperformance in the coming months.