News Release
Gilt-Edged Auctions
16 September 1997
AMOUNT: £1,500 million
STOCK: 7% TREASURY STOCK 2002
MATURITY DATE: 7 JUNE 2002
INTEREST DATES: 7 JUNE / 7 DECEMBER
AUCTION DATE: 23 SEPTEMBER 1997
AMOUNT: £1,500 million
STOCK: 8% TREASURY STOCK 2021
MATURITY DATE: 7 JUNE 2021
INTEREST DATES: 7 JUNE/7 DECEMBER
AUCTION DATE: 25 SEPTEMBER 1997
The Bank of England announces the issue by Her Majesty's Treasury of a further £1,500 million of 7% Treasury Stock 2002 ("7TY2002") and a further £1,500 million of 8% Treasury Stock 2021 ("8TY2021"), for auction on a bid price basis on Tuesday, 23 September 1997 and Thursday, 25 September 1997 respectively.
The new issues will be fully paid and fungible with the relevant stock already in issue, and will be strippable when an official gilt strips facility is introduced.
Interest on 7TY2002 and 8TY2021 is payable half-yearly on 7 June and 7 December. The price payable for each further issue of stock will include an amount equal to accrued interest; for 7TY2002, this will be from 7 June 1997 (the last interest payment date of the stock) to 24 September 1997 (the settlement date of this further issue) at the rate of £2.09041 per £100 nominal of stock; for 8TY2021, this will be from 7 June 1997 (the last interest payment date of the stock) to 26 September 1997 (the settlement date of this further issue) at the rate of £2.43288 per £100 nominal of stock.
The further issues of 7TY2002 and 8TY2021 will each rank for the full six months' interest due on 7 December 1997. 7TY2002 will be repaid at par on 7 June 2002 and 8TY2021 will be repaid at par on 7 June 2021
Interest payments will be paid to all holders of 7TY2002 and 8TY2021 without deduction of United Kingdom income tax. However, holders on the Bank of England register may elect to have United Kingdom income tax deducted from interest payments should they so wish.
Under Rule 2.3 of the London Stock Exchange, dealings in the further issues of stock on a "when issued" basis may be conducted from the time of this announcement until the close of business on Tuesday, 23 September 1997 for 7TY2002 using SEDOL and ISIN codes 0-060-134 and GB0000601343 respectively, and until the close of business on Thursday, 25 September 1997 for 8TY2021 using SEDOL and ISIN codes 0-060-714 and GB0000607142 respectively. The SEDOL and ISIN codes to be used after these dates are those for the existing stocks: 0-999-722 and GB0009997221 respectively for 7TY2002 and 0-999-799 and GB0009997999 respectively for 8TY2021. For trade reporting purposes, the EPIC code "AUC" should be used for 7TY2002 and "AUCA" for 8TY2021.
Bids may be made on either a competitive or a non-competitive basis. Details of the bidding procedures are set out in the prospectuses and the Information Memorandum for Issues of British Government Stock dated 27 March 1997.
The prospectuses for competitive bids and non-competitive bids will be advertised in the Press. Application forms must be sent to the Bank of England, New Issues, PO Box 444, Gloucester, GL1 1NP to arrive not later than 10.30 am on Tuesday, 23 September 1997 in the case of 7TY2002 and 10.30 am on Thursday, 25 September 1997 in the case of 8TY2021 ; or lodged by hand at the Central Gilts & Moneymarkets Office, Bank of England, Threadneedle Street, London not later than 10.30 am on Tuesday, 23 September 1997 for 7TY2002 and 10.30 am on Thursday, 25 September 1997 for 8TY2021 .
Gilt-edged market makers may bid by telephone to the Bank of England not later than 10.30 am on Tuesday, 23 September 1997 for 7TY2002 and 10.30 am on Thursday, 25 September 1997 for 8TY2021 .
Notes to Editors
The Bank of England announced on 2 July 1997 that, in the light of the reduction in the forecast CGBR for 1997-98 announced in the Budget and, consequently, in the gilt sales requirement, the August 1997 and February 1998 auctions had been cancelled. In addition,the Bank also announced that the two dual auctions, which were due to be held in the third and fourth quarters of the 1997-98 financial year, had been changed to single auctions. The revised auction calendar, therefore, provides for nine auction sales in the 1997-98 financial year of which seven are single stock auctions and two are dual stock auctions. Today's notice provides details of the fifth auction sale of the year.
The Bank's announcement of 11 July 1997 provided details of the stocks to be auctioned in the second quarter of the 1997-98 financial year - July 1997 through to September 1997. The stocks to be auctioned in the third quarter of the 1997-98 financial year are due to be announced at 3.30 pm on 30 September 1997.
The £1,500 million issue of 7% Treasury Stock 2002 is fully paid and, from 24 September 1997, will be indistinguishable from the £7,500 million already in issue. This means that successful bidders at the auction will pay for the interest which has accrued since the last interest payment on this stock on 7 June 1997, at the rate of £2.09041 per £100 nominal of stock; and also that the next interest payment will be due to them on 7 December 1997.
The £1,500 million issue of 8% Treasury Stock 2021 is fully paid and, from 26 September 1997, will be indistinguishable from the £15,000 million already in issue. This means that successful bidders at the auction will pay for the interest which has accrued since the last interest payment on this stock on 7 June 1997, at the rate of £2.43288 per £100 nominal of stock; and also that the next interest payment will be due to them on 7 December 1997.
As announced in the Budget, with effect from 6 April 1998, all gilt interest will be payable without deduction of withholding tax, although investors who wish to continue to receive interest net will be able to do so. The quarterly accounting arrangements for gross gilt interest received by UK taxable companies will remain in place for interest on those gilts to which quarterly accounting at present applies; but quarterly accounting will not apply to interest on future new gilt issues unless H M Treasury directs at the time a new gilt is issued that it is to apply to interest on that gilt. The quarterly accounting arrangements do not apply to 7% Treasury Stock 2002 or to 8% Treasury Stock 2021.
Copies of the Information Memorandum are available from the Bank of England, Registrar's Department, New Issues, Southgate House, Southgate Street, Gloucester, GL1 1UW (telephone +44 (0)1452 398123; fax +44 (0)1452 398449).
Key Resources
 |
News Release - Information Memorandum for Issues
of British Government Stock, 27 March 1997 Read |
|
News Release - Gilt-Edged Market: 1997-98 Financing
Requirements and Auction Programme 2 July 1997 Read |
|
News Release - Gilt-edged auctions: July to
September 1997, 11 July 1997 Read |
