News Release
Gilt-Edged Auction

02 December 1997

Amount: £2,000 million
Stock: 6½% Treasury Stock 2003
Maturity Date: 7 December 2003
Interest Dates: 7 June/7 December
Auction Date: 10 December 1997

The Bank of England announces the issue by Her Majesty's Treasury of £2,000 million of 6½% Treasury Stock 2003, for auction on a fully paid bid price basis on Wednesday, 10 December 1997. The new issue will be strippable.

Interest on 6½% Treasury Stock 2003 is payable half-yearly on 7 June and 7 December. Interest on the stock will accrue from 11 December 1997, the issue date of the stock, and the first interest payment will be due on 7 June 1998 at the rate of £3.1699 per £100 nominal of stock. The stock will be repayable at par on 7 December 2003. 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.

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, and trading on a "when-issued" basis in the strips of those potentially strippable stocks already in issue commenced on 1 December 1997. 6½% Treasury Stock 2003 will be strippable from the stock's date of issue on 11 December 1997. Details of the official strips facility are set out in the Memorandum Relating to Arrangements for the Stripping and Reconstitution of United Kingdom Government Stock of October 1997.

Under Rule 2.3 of the London Stock Exchange, dealings in the unstripped 6½% Treasury Stock 2003 on a "when-issued" basis may be conducted from the time of this announcement until the close of business on Wednesday, 10 December 1997. The SEDOL and ISIN codes to be used for both "when-issued" trading and following the stock’s issue on 11 December 1997 are 0-163-301 and GB0001633014 respectively. The TIDM code "AUC" should be used for trade reporting purposes.

"When-issued" trading in the principal and coupon strips of 6½% Treasury Stock 2003 may be conducted from Monday, 8 December 1997 until the close of business on Wednesday, 10 December 1997. The SEDOL and ISIN codes to be used for "when-issued" trading in the principal and coupon strips for the period 8 December to 10 December inclusive are appended to this notice together with the TIDM codes which 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, 10 December 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, 10 December 1997.

Gilt-edged market makers may bid by telephone to the Bank of England not later than 10.30 am on Wednesday, 10 December 1997.

Note 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 that day's 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 seventh auction sale of the year.

The Bank's announcement of 30 September 1997 gave details of the stocks to be auctioned in the third quarter of the 1997-98 financial year. The Bank further announced on 30 October 1997 that, in the light of the timing of the Green Budget, the auction due to be held on 26 November 1997 had been postponed until 10 December 1997.

The stocks to be auctioned in the final quarter of the 1997-98 financial year will be announced at 3.30 pm on 30 December 1997.

The £2,000 million issue of 6½% Treasury Stock 2003 will, on issue, be the first new stock created in the 1997-98 financial year and the eighth stock strippable through the official gilt strips facility. The other stocks to be strippable are: 8% Treasury Stock 2000; 7% Treasury Stock 2002; 8½% Treasury Stock 2005; 7½% Treasury Stock 2006; 7¼% Treasury Stock 2007; 8% Treasury Stock 2015; and 8% Treasury Stock 2021.

As 6½% Treasury Stock 2003 matures on a non- business day, it will be repaid on the following business day. The maturity date has been chosen so that coupon strips derived from the stock are fungible with coupon strips payable on 7 June and 7 December.

The Budget in July announced that, 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 remain in place for interest on those gilts to which quarterly accounting at present applies but, as announced in the pre-Budget speech on 25 November 1997, will be abolished from 1 April 1999. The quarterly accounting arrangements do not apply to 6½% Treasury Stock 2003.

Copies of the Information Memorandum are also 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).

The Bank of England issued a paper on the official gilt strips facility (File (size129k) readable with Adobe Acrobat V3), which incorporates the Strips Memorandum as an appendix, on 8 October 1997; copies of this are also available on request from the Bank (telephone +44 (0)171-601 3672).

Key Resources

	News Release - Inaugurating the Upgrade of the Central Gilts Office Start Date for Gilt Strips Market 3 October 1997 Read
	Memorandum Relating to Arrangements for the Stripping and Reconstruction of United Kingdom Government Stock Download PDF (35k)
	Additional Codes to be Used in Due Course for "When Issued" Trading and Thereafter in the Principal and Coupon Strips of 6% Treasury Stock 2028. Download PDF (7k)
	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: October to December 1997, 30 September 1997 Read