Asset Purchase Facility Gilt Purchases - Market Notice 3 August 2017

As set out in the MPC’s statement of 3 August 2017, the MPC has agreed to make £10.1bn of gilt purchases, financed by central bank reserves, to reinvest the cash flows associated with the maturities on 25 August and 7 September 2017 of gilts owned by the Asset Purchase Facility (APF).
Published on 03 August 2017

2. Operations to make these gilt purchases will commence in the week beginning 4 September 2017. The range of gilts eligible for purchase will remain unchanged from previous operations. The Bank will continue, normally, to conduct three auctions a week: gilts with a residual maturity of 3-7 years will be purchased on Mondays; of over 15 years on Tuesdays; and of 7-15 years on Wednesdays.

3. The Bank intends to purchase evenly across the three gilt maturity sectors. The size of auctions will initially be £1,125mn for each maturity sector.

4. The Bank will confirm details of the following week’s operations each Thursday at 16.00. The Bank does not currently intend to purchase gilts where the Bank holds more than 70% of the “free float”, i.e. the total amount in issue minus government holdings. The Bank will, however, continue to keep the gilts eligible for purchase by the APF under review.

5. As the DMO has ceased to publish intraday gilt yields, offers into APF gilt purchase operations will now be allocated based on their attractiveness relative to market mid yields, as published by Tradeweb, at the close of the auction.

6. Other than as amended by this Market Notice, previous Market Notices relating to the Bank’s gilt purchases under the APF will apply.

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