UK Sovereign

As a year where political upsets became the norm drew to a close, GlobalCapital picks the standout trades from a turbulent 2016.

The UK Debt Management Office has picked a conventional Gilt with a tenor in the 40 year area for a syndication it added to its 2016-17 funding programme after November’s autumn statement.

The UK Debt Management Office has picked a conventional Gilt with a tenor in the 40 year area for a syndication it added to its 2016-17 funding programme after November’s autumn statement.

Rating: Aa1/AA/AA

Rising inflation expectations, as governments switch their focus to fiscal stimulus and central banks move away from extremely loose monetary policy, are boosting demand for inflation linked bonds. Opec’s agreement this week to cut oil production pushed demand even higher. But there are question marks over whether issuers will adapt their funding menus to satisfy the new appetite, writes Craig McGlashan.

The Italian referendum on December 4 has been lurking in SSA bankers' diaries as a dangerous risk event but, on Tuesday, rumours of enhanced European Central Bank support led to a rally in Italian government paper.

The UK Debt Management Office broke its record low real yield at syndication on Tuesday for the second time in just over four months. The sovereign has also announced the results of a consultation meeting on what form its final two syndications of the 2016-17 financial year should take.

There may be grounds for criticising the UK’s asset management industry, as the Financial Conduct Authority has done this week. Finding that price competition among active managers is weak, it proposes new regulations to make charges and policies clearer.

The UK Debt Management Office will have to raise an additional £20.6bn this financial year, including through an extra syndication, but SSA bankers are confident that there will be enough demand to meet the supply.

The UK Municipal Bonds Agency is looking to bring a medium dated sterling bond for its debut issue, which it hopes will come to the market in the next three months.

The UK Debt Management Office will have to raise an additional £20.6bn this financial year, including an extra syndication, following the announcement of the government’s borrowing plans in Wednesday’s autumn statement by chancellor of the exchequer, Philip Hammond.

The UK Debt Management Office has selected its syndicate and announced the maturity for its upcoming index-linked syndication.