47881_Budget_2015_Web_Accessible

Gilt issuance by maturity, type and methodB.7 Decisions on the skew of gilt issuance are set annually with reference to the government’sdebt management objective, as set out in the ‘Debt and reserves management report 2015-16’.B.8 Auctions will remain the government’s primary method of gilt issuance. It is anticipatedthat in 2015-16:••£105.2 billion (78.9% of total issuance) will be issued by auction••£24.2 billion (18.1% of total issuance) will be issued by syndicationB.9 Issuance by auction and syndication is planned to be split by maturity and type as follows:••£33.9 billion of short conventional gilts (25.4% of total issuance)••£26.7 billion of medium conventional gilts (20.0% of total issuance)••£37.4 billion of long conventional gilts (28.0% of total issuance)••£31.4 billion of index-linked gilts (23.5% of total issuance)B.10 In addition, the Debt Management Office (DMO) plans to deliver gilt sales via eithersyndication or mini-tender of £4.0 billion (3.0% of total issuance). The DMO determines thematurities and types of gilts to be issued within this £4.0 billion in consultation with the marketduring the year.Undated giltsB.11 The government will redeem the 4 remaining undated gilts in the debt portfolio oncethe Finance Bill 2015 has received Royal Assent. These outstanding gilts total £382 million,comprising:••£0.7 million of 2¾% Annuities••£218.7 million of 2½% Treasury Stock••£161.2 million of 2½% Consolidated Stock••£0.9 million of 2½% AnnuitiesB.12 This follows the announcement at Autumn Statement 2014 that the government wouldadopt a strategy to remove all the undated gilts from the gilt portfolio where it is deemed valuefor money. This in part reflects the government’s ongoing commitment to modernising thegilt market and to focussing its issuance on large, liquid benchmark gilts. Redemption of the 4remaining undated gilts will deliver in full on this strategy.B.13 The enabling legislation required to redeem 2¾% Annuities, 2½% Annuities and 2½%Consolidated Stock will be included in Finance Bill 2015. The government has previouslyannounced the redemption of 4 other undated gilts including 3½% War Loan.104 Budget 2015