UK Sovereign

The DMO has mandated banks for its final syndicated trade of the 2012 fiscal year, a tap of long-dated inflation linked Gilts. The deal is likely to see sharper investor demand due to the Bank of England’s higher than expected inflation forecast issued on Wednesday.

The UK will wrap up its syndication programme for financial year 2012-13 with a re-opening of its 0.25% index-linked 2052 Gilt, its fifth index-linked syndication of the financial year.

The United Kingdom’s Debt Management Office printed its first syndicated trade of 2013 on Tuesday, a tap of a 31 year Gilt. The deal reached subscription quickly and achieved a healthy oversubscription over the course of the hour long bookbuild. The borrower will round out its syndicated funding year with an index linked bond in February.

Network Rail is looking at the possibility of issuing a linker, while Axa has suggested that a new breed of linkers should be introduced that would appeal to pension funds. The developments follow the UK government’s decision to leave RPI unchanged earlier in January which means that index linked bonds in sterling are free from the shadow of uncertainty.

The UK’s Debt Management Office and the Dutch State Treasury Agency have taken a “sensible” approach by targeting long dated deals in the early part of 2013, bankers told SSA Markets.

UK investors have taken the most sensible possible reaction to the news that S&P has revised its outlook on the UK’s credit rating to negative, and heaved a collective sigh of boredom.

Standard & Poor’s cut its outlook on the UK’s credit rating on Thursday evening, leaving the UK lumbered with a negative outlook on its AAA rating from all three major ratings agencies. However, the impact on UK government debt has been minimal and even a full downgrade of the UK’s credit rating in 2013 is unlikely to cause much damage.

The UK’s Debt Management Office (DMO), which plans to sell a pair of syndications before April 2013, may well increase its issuance in the medium part of the curve during its next fiscal year, according to Morgan Stanley.

We’re all used to governments being unable to work together to fix a problem. It’s been the defining feature of the whole Eurozone crisis. But judging by the separate and seemingly contradicting proposals from the UK government on Thursday, perhaps we’ve all been a bit hard on Eurozone politicians. After all, the UK can’t even agree with itself.

The United Kingdom Debt Management Office announced on Wednesday that it has decided to remove the 50 year maturity cap on Gilts, and that in the next fiscal year it will likely look to sell debt maturing in 50 to 60 years.

The UK Debt Management Office (DMO) raised £3.25bn through a tap of its 0.125% 2044 index-linked Gilts on Thursday afternoon, in an auction unusually scheduled for a Thursday — and a US holiday — to coincide with the extension of two key indices.

Robert Stheeman, chief executive of the UK Debt Management Office, the issuer of gilts, has weighed into a debate sparked by Lord Adair Turner on the cancellation of government debt saying the idea, "most likely would be illegal."