UK bonds meet robust demand
The Debt Management Office in the UK says its auction of long-dated government bonds has met a “robust result”.
A DMO spokesman declined to speculate on the buyers. But he said: “It’s a fair bet they’ll find their way to the people you’d expect to be buying.” He cited statistics showing pension funds and insurance companies are the largest holders of index-linked gilts.
He added: “It’s the largest amount of risk we’ve ever put into the market in one day.”
The auction was widely watched amid increasing talk of pension fund demand for longer-dated assets. The demand is driven by accounting changes and regulatory concerns over the Pension Protection Fund levy, market participants say.
The DMO said the auction of £2.5bn (e3.7bn) of 41/2 Treasury Gilt 2055 was “allotted in full”. It received £3.7bn in bids, making it 1.49 times oversubscribed.