The Debt Management Office starts to produce "Plan B". It has a lot of paper to sell, and taking it all to the market might be difficult. Hence, a call for help from the Banks....
June 15 (Bloomberg) -- Britain plans to sell as much as 5 billion pounds ($8.2 billion) of bonds through banks this week, according to the U.K. Debt Management Office, as government borrowing surges to a record to fund economic stimulus packages.
The “indicative range being talked about is 3 to 5 billion pounds,” Steve Whiting, a spokesman for the debt agency in London, said today. The sale is planned for tomorrow, he said. The debt office hired Barclays Plc, Goldman Sachs Group Inc., HSBC Holdings Plc and Royal Bank of Scotland Group Plc to offer the 4.50 percent gilt due September 2034, it said on June 9.
The first so-called syndication since 2005 for the U.K. is part of a record 220 billion pounds the Treasury aims to raise this year to finance an expanding budget deficit as the recession crimps tax receipts. Chancellor of the Exchequer Alistair Darling said on April 22 the budget shortfall in the year through March 2010 will reach 12.4 percent of gross domestic product, the most among the Group of 20 nations.