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UK draws nearly $100 billion demand for new 30-year bond

·1-min read

LONDON (Reuters) - The launch of a new 30-year British government bond on Tuesday attracted almost $100 billion in demand from investors, according to figures from banks running the syndicated debt sale.

Britain sold 6 billion pounds ($8.34 billion) of the new 1.25% 2051 gilt and attracted orders worth more than 69 billion pounds - a healthy sum although behind deals last year that saw record order books in excess of 70 billion.

Domestic investors accounted for 89% of demand, the United Kingdom Debt Management Office said. Long-dated gilts typically attract strong demand from British life insurers and pension funds which need them to match long-term liabilities.

The sale is part of the DMO's plan to sell 252.6 billion pounds of bonds in the current 2021/22 financial year to help pay for the economic response to the COVID-19 pandemic. Since the start of the financial year, gilt sales have raised 23.8 billion pounds.

In the previous financial year that ended in March, the DMO sold a record 485.8 billion pounds of gilts.

Barclays, Goldman Sachs, Lloyds, NatWest Markets and RBC acted jointly as bookrunners for the deal.

The July 2051 bond was priced to yield 1.3115%, the DMO said, 1.5 basis points more than the yield of the 0.625% October 2050 gilt, the 30-year benchmark bond which the new issue is designed to supersede in due course.

DMO chief executive Robert Stheeman described the syndication as "well received by the market and efficiently executed".

British government bond prices were little changed on the day, in line with the U.S. and German bond markets.

($1 = 0.7197 pounds)

(Reporting by Andy Bruce and David Milliken. Editing by Andrew MacAskill)