20b worth to finance energy roads and water.

Coupon rate 12%, paid half-yearly

Openning for sale on 16th Sept

Value date 3rd Oct 2012

Redemption in three phases: 2015, 2019 and 2023

Is 12% (i.e. 10.2% after tax) abit on the low side? Inflation is 16%. Average mortgage/lending is circa 15%.

I wonder who will buy this stuff when inflation is soaring, and money markets have been in turmoil?

Is the 12% fixed or subject to bidding? If not fixed, then potential investors will surely quote rates higher than prevailing inflation (> 16%).

Happy Hunting.

Although coupon rate is fixed at 12% you buy at a discounted price so depending on your bid price your effective rate could be as high as 18% or more if you are lucky, then add no w/h tax! I'll bid at around 18%, so what if I don't get!

This bond will flop. Its too soon after all the recent upheavals, and perhaps the banks will show CBK the displeasure of how they have been handled recently.

It won't flop with UK declaring the government is broke they really need this money,most definitely guys will go in at high rates but there will be some level of caution since there is some liquidity in the market from matured papers...

It is Non Competetive bids which are limited to a maximum of 20m. I have bought bonds several times in the past, my bids are never (and will never} reach 20m. My bids are always competetive and in most cases I've got at above weighted average rate, which is used for all non competetive bids.

I think @Amolo was only trying to clarify that there is no lower limit for competitive bids as long as they are above 50k.

@Maka had suggested that one needs at least 20m to make a competitive bid. The truth is that while there is an upper limit for non-competitive bids, there isn't a lower one for competitive bids.

Period of sale: August 16th, 2011 - September 27,2011