A tap of the UK’s 2.5% 2065 conventional Gilt in October was the highly preferred option for GEMMs at a meeting with the DMO and investors on Monday. Some banks preferred a reopening of the July 2047 Gilt — which the UK will launch on September 20 — while there was the odd call for a new bond maturing in 2058 or 2070.
Investors were less picky on a maturity for the conventional bond. Of those with an opinion, most agreed with the majority GEMM view that a tap of the 2065 Gilt would be best, although some called for a new 40 year bond or a Gilt maturing in 2071 or 2072.
Opinions was mixed on which maturity the DMO should target with its inflation linker in November. The most popular choice among GEMMs was to reopen the 2065 inflation linker, but investor preference was for bonds maturing in 30 to 40 years. The second most popular option among GEMMs, however, was to tap the 2046 linker — keeping them in line with some of the investors that expressed a desire for a 30 year issue.
The DMO will announce its issuance calendar for October to December on August 31. Alongside potential syndications, the sovereign holds 11 Gilt auctions during those months — nine for conventional bonds and two for index-linkers.
