Long gilt oversubscribed as buyers assess its merits

After a mixed reaction to the original announcement of 50-year gilts, fund managers appear to be mor...

After a mixed reaction to the original announcement of 50-year gilts, fund managers appear to be more bullish on them after the first auction at the end of last month. Graeme Caughey, head of gilts at Swip, says the 50-year gilt features a current redemption yield of 4.23%. "With many institutions seeking 50-year bonds to better match longer dated liabilities, the 50-year gilt will provide a benchmark against which other instruments of similar duration can be traded and valued," he says. "This should see a strong pickup in issuance of other long dated bond assets and in the liquidity of...