UK sells record 15 billion pounds of new gilt via syndication, but at a cost

MANCHESTER, England, ⁠April 14 (Reuters) - Britain sold ​a record sum of government bonds via syndication on Tuesday, offloading 15 billion pounds ($20.3 billion) ​of ‌a new 10-year gilt to investors, although at the highest yield for ⁠bonds of this maturity since 2008.

The syndication represented ⁠the biggest supply at ​a single event since the UK Debt Management Office began operations in 1998, but also the costliest 10-year borrowing since an auction in July 2008.

The ​DMO sold ‌the new 2036 gilt with a yield of 4.9158%, a premium of 8.5 basis points over the 10-year benchmark gilt that launched with a then-record volume of 14 billion pounds in September.

The sale ​of the gilt, which has a coupon of 4.875%, attracted orders worth ‌148.2 billion pounds - a new record, surpassing the previous order book record of 142.1 billion pounds set ‌in February 2025, also for the launch of a 10-year gilt.

"I am very pleased to see the syndication programme for this new financial year ​commence on such a strong note," said DMO chief executive Jessica Pulay, adding ‌that the sale attracted a record number of investors.

"This morning's offering serves as a further demonstration of the considerable strength and depth of the ⁠gilt market, notwithstanding ⁠the volatile market backdrop."

Gilts have fared worse ‌than other advanced economy debt since the onset of the Iran war in late ​February, reflecting Britain's ​reliance on imported natural gas and its relatively high ‌rates of inflation.

Bank of America Securities, Goldman Sachs, HSBC, Morgan Stanley, Santander and UBS Investment Bank were joint bookrunners for Tuesday's transaction. ($1 = 0.7381 pounds) (Reporting by Andy Bruce Editing by Keith Weir)