Consolidated Market Notice: Asset Purchase Facility: Gilt Purchases

Competitive offers

The size of the competitive auction will be announced at 13.00, reflecting the amount allocated to non-competitive offers. Competitive auctions will normally begin at 14.15 and finish at 14.45. They will be held using the Bank’s electronic tendering system, Btender. The Bank reserves the right to restrict the number and/or the timing of offers submitted by counterparties who do not have access to Btender.

Counterparties must input the nominal sterling amount in millions for each specific gilt they wish to sell and the clean price they wish to offer.

The number of decimal places allowed for the price is currently 3.

Offers are submitted by counterparties using a clean price. When offers are received in Btender they are also converted to a yield using the standard gilt market conversion calculation available on the DMO’s website, and the yield is also displayed for information to counterparties.

The minimum offer amount and increment are currently set at £5 million and £1 million respectively.

The Bank will not restrict the maximum total value of gilts for purchase from a single counterparty in each auction.

The Bank reserves the right to reject offers, in whole or in part, including in the light of other offers received; and reserves the right to set a maximum offer price/minimum yield.

Offers will be allocated in descending yield order, based on the attractiveness of offers for different stocks relative to market yields. Offers that are accepted at the lowest yield may be scaled down on a pro rata basis and will be rounded down to the nearest allocation increment, currently set at £0.1 million.

Offers are accepted in full or in part at the counterparty’s offer price. The amount of each accepted offer in total proceeds will be paid to the counterparty.

The Bank reserves the right to cancel an auction at any time before the results are published. If an auction is cancelled it may be re-scheduled to take place later the same day, or on a subsequent day.

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