News Release
Additional Issues of Government Stock
27 September 1996
The Bank of England announces that Her Majesty's Treasury has created on 27 September 1996 additional amounts of the following stocks:
GBP200 million 7½% Treasury Stock 2006
GBP200 million 2½%% Index-Linked Treasury Stock 2003
GBP50 million 2½% Index-Linked Treasury Stock 2016
The issue price was in each case the middle market price of the
relevant stock at 10.15 am on 27 September 1996 as certified by
the Government Broker.
In each case, the stock issued on 27 September 1996 represents a further amount of the relevant existing stock, ranking in all respects pari passu with that stock and subject to the terms and conditions applicable to that stock, and subject also to the provision contained in the final paragraph of this notice.
Application has been made to the London Stock Exchange for each further amount of stock to be admitted to the Official List.
Copies of the prospectuses for 7½% Treasury Stock 2006 dated 19 September 1995, 2½% Index-Linked Treasury Stock 2003 dated 22 October 1982 and 2½% Index-Linked Treasury Stock 2016 dated 14 January 1983 may be obtained from the Bank of England, New Issues, Southgate House, Southgate Street, Gloucester, GL1 1UW.
The stocks are repayable, and interest is payable half-yearly, on the dates shown below (in the cases of 2½% Index-Linked Treasury Stock 2003 and 2½% Index-Linked Treasury Stock 2016 provision is made in the prospectuses for stockholders to be offered the right of early redemption under certain circumstances):
| Stock | Redemption date |
Interest payment dates |
| 7½% Treasury Stock 2006 | 7 December 2006 | 7 June 7 December |
| 2½% Index-Linked Treasury Stock 2003 |
20 May 2003 | 20 May 20 November |
| 2½% Index-Linked Treasury Stock 2016 |
26 July 2016 | 26 January 26 July |
7½% Treasury Stock 2006 is repayable at par.
Both the principal of and the interest on 2½% Index-Linked Treasury Stock 2003 and 2½% Index-Linked Treasury Stock 2016 are indexed to the General Index of Retail Prices. The Index figure relevant to any month is that published seven months previously and relating to the month before the month of publication. The Index figure relevant to the month of issue of 2½% Index-Linked Treasury Stock 2003 is that relating to February 1982 (310.7); the equivalent Index figure for 2½% Index-Linked Treasury Stock 2016 is that relating to May 1982 (322.0). These Index figures will be used for the purposes of calculating payments of principal and interest due in respect of the further amounts of stock: the calculations will, as provided for in the prospectuses, take account of the revision of the Index to a new base of January 1987=100 (on the old base the Index for January 1987 was 394.5).
The relevant Index figures for the half-yearly interest payments on 2½% Index-Linked Treasury Stock 2003 and 2½% Index-Linked Treasury Stock 2016 are as follows:
Relevant Index figure
| Interest payable | Published in | Relating to |
| May | October of the previous year | September |
| November | April of the same year | March |
| January | June of the previous year | May |
| July | December of the previous year | November |
The further amounts of the stocks will rank for a full six months' interest on the next interest payment date applicable to the relevant stock. Official dealings in the further amounts of the relevant stock on the London Stock Exchange are expected to commence from 10.45 am on 27 September 1996.
Government Statement
Attention is drawn to the statement issued by Her Majesty's Treasury on 29 May 1985 which explained that, in the interest of the orderly conduct of fiscal policy, neither Her Majesty's Government nor the Bank of England or their respective servants or agents undertake to disclose tax changes decided on but not yet announced, even where they may specifically affect the terms on which, or the conditions under which, these further amounts of stock are issued or sold by or on behalf of the Government or the Bank; that no responsibility can therefore be accepted for any omission to make such disclosure; and that such omission shall neither render any transaction liable to be set aside nor give rise to any claim for compensation.
Notes to Editors
The further issues of stock today are to replenish official portfolios for the purposes of market management and to assist in meeting the Government's need for finance. The stocks will be available for dealing from 10.45 am today.
The terms of issue of 7½% Treasury Stock 2006 include provision for exemption from United Kingdom taxation in favour of non-resident holders.
The Finance Act 1996, which became law on 29 April 1996, implemented a number of reforms to the tax legislation affecting investors in all types of debt, including gilt-edged securities.
For corporate investors the general approach of the new rules is to treat all profits and losses on securities (including gilt-edged securities) as income, with interest payments taxed as they accrue rather than as they are paid. An indexation allowance is available for Index-Linked gilt-edged securities held for non-trading purposes. For investors other than corporate investors, the tax position is largely unchanged; in particular, gilt-edged securities will continue to be outside the scope of capital gains tax.
Following these issues, the amount outstanding of each stock is as follows:
| Stock | Amount outstanding |
| 7½% | Treasury Stock 2006 GBP11,700 million |
| 2½% | Index-Linked Treasury Stock 2003 GBP2,150 million |
| 2½% | Index-Linked Treasury Stock 2016 GBP3,400 million |
