News Release
Gilt-Edged Auction
21 October 1997
AMOUNT: £2,000 million
STOCK: 7¼% TREASURY STOCK 2007
MATURITY DATE: 7 DECEMBER 2007
INTEREST DATES: 7 JUNE/7 DECEMBER
AUCTION DATE: 29 OCTOBER 1997
The Bank of England announces the issue by Her Majesty's Treasury of a further £2,000 million of 7¼% Treasury Stock 2007, for auction on a fully paid bid price basis on Wednesday, 29 October 1997.
7¼% Treasury Stock 2007 will be fungible with the stock already in issue, and will be strippable when an official gilt strips facility is introduced. The Bank of England announced on 3 October 1997 that it is planned that the official gilt strips facility will be available from 8 December 1997 with trading on a "when-issued" basis in gilt strips being permitted from 1 December 1997. This will apply to the principal and coupon strips of 7¼% Treasury Stock 2007.
Interest on 7¼% Treasury Stock 2007 is payable half-yearly on 7 June and 7 December. The price payable for this further issue of the stock will include an amount equal to accrued interest from 7 June 1997 (the last interest payment date of the stock) to 30 October 1997 (the settlement date of this further issue) at the rate of £2.88014 per £100 nominal of stock. This further issue will rank for the full six months' interest due on 7 December 1997. The stock will be repaid at par on 7 December 2007. Interest payments will be paid to all holders of this stock 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 issue of 7¼% Treasury Stock 2007 on a "when-issued" basis may be conducted from the time of this announcement until the close of business on Wednesday, 29 October 1997 using SEDOL and ISIN codes 0-163-293 and GB0001632933 respectively. The SEDOL and ISIN codes to be used after this date are those for the existing stock: 0-999-711 and GB0009997114 respectively. The EPIC code "AUC" should be used for trade reporting purposes.
Bids may be made on either a competitive or a non-competitive basis. Details of the bidding procedures are set out in the prospectus and in the Information Memorandum for Issues of British Government Stock dated 27 March 1997.
The prospectus 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 Wednesday, 29 October 1997; or lodged by hand at the Central Gilts & Moneymarkets Office, Bank of England, Threadneedle Street, London not later than 10.30 am on Wednesday, 29 October 1997.
Gilt-edged market makers may bid by telephone to the Bank of England not later than 10.30 am on Wednesday, 29 October 1997.
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 stock auctions, which were due to be held in the third and fourth quarters of the 1997-98 financial year, had been changed to single stock 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 sixth auction sale of the year.
The Bank's announcement of 30 September 1997 provided details of the stocks to be auctioned in the third quarter of the 1997-98 financial year: October 1997 (i.e. today's announcement)and November 1997. The date of the November auction will be reviewed in the light of the timing of the Green Budget.
The £2,000 million issue of 7¼% Treasury Stock 2007 is fully paid and, from 30 October 1997, will be indistinguishable from the £7,000 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 £2.88014 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 Her Majesty's 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 7¼% Treasury Stock 2007.
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 01452 398123; fax + 44 01452 398449). The Information Memorandum is also available on the Bank of England's internet site.
The Bank of England issued a paper on the official gilt strips facility on 8 October 1997; copies of this are available on request from the Bank (+44 171-601 3672) and it is also available on the Bank's internet site.
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 - Foreign Exchange Settlement Risk 30 September 1997 Read |
