July 26, 2016 / 12:35 PM / 2 years ago

UK sells 50-year index-linked bond via syndication at record-low real yield

LONDON, July 26 (Reuters) - The UK Debt Management Office said it would issue 2.5 billion pounds ($3.28 billion) of 2065 index-linked bonds at a real yield of -1.3245 percent on Tuesday, the lowest-ever inflation-adjusted return for a bond sold via a syndication.

Bookrunners for Tuesday’s syndication said it attracted orders worth more than 10 billion pounds, and the DMO confirmed the sale had priced at the high end of initial guidance, offering a yield of 0.75 basis points above the 2062 index-linked gilt.

The yield was a record low for any gilt offered to investors via a consortium of banks, although an auction of index-linked bonds maturing in 2026 on July 13 recorded an even more negative real yield of -1.578 percent.

The DMO set the price of the 2065 gilt at 201.335, and said that when the sale allotments settled on Wednesday, this would take the nominal amount of the bond in issue to 5.25 billion ponds. ($1 = 0.7612 pounds) (Reporting by David Milliken; Editing by Ana Nicolaci da Costa)

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