Longest-maturity bonds become available to UK investors

Bond investors here in the UK who have been eagerly waiting for the government to make more of its longest-maturity debt available for purchase will have been pleased with a recent decision.

A dedicated bond auction was recently scheduled last Tuesday that included £1bn worth of gilts set to mature in 2071, with further bonds now planned for a sale this June. Minutes were revealed from a conference call held with the Debt Management Office, showing that UK investors had requested that more of the bonds become available to buy, as there are not enough currently available to meet demand. The minutes from the meeting also mentioned that dealers had also reported that there was a strong demand for this longest-dated debt.

The present success of the UK’s COVID-19 vaccine rollout, along with the government’s plans to tentatively reopen the country’s economy, has put pressure on gilts, effectively lifting the 50-year yields to the highest they have been recorded at last month since back in 2020.

Another indicator of demand is that these same dealers had previously showed signs of being reluctant to sell off their long-maturity bonds inventory back to the Bank of England this year, as part of the UK financial institution’s “quantitative easing” scheme. This behaviour indicates that the dealers do not wish to find themselves caught short with a lack of bonds if investors should want to purchase them.

UK investors seeking guidance on buying longest-maturity bonds can look for independent financial advice in Chester, London, and other major cities from wealth management specialists.


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