LONDON (MNI) – Cover at the Bank of England’s over 25-year reverse
gilt auction Tuesday, the first auction in 2012 covering the ultra long
end of the market, came in at 2.02.
The BOE did not hold an over 25 year auction last week, which
implies it will do slightly less than a third of its current stg75
billion of asset purchases in this segment of the market.
The central bank faces a tougher challenge ensuring supply for its
over 25 year reverse auctions, with banks holding on to these gilts for
capital adequacy purposes and pension funds holding them for
asset/liability matching purposes. The cover, however, at this auction
was robust.
The BOE offered to buy nine Gilts in Tuesday’s over 25-year. It
bought seven, with no offers accepted for the 4.0% 2060 and the 3.75%
2052.
–London newsroom 0044 20 7862 7491; email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MMBBE$]
