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BOE to sell US$2b of 3-year bonds

THE Bank of England plans to sell US$2 billion of three-year bonds, its third annual sale of debt to help finance its foreign-exchange reserves.

The notes may be priced to yield about 40 basis points over the benchmark mid-swap rate, according to a banker involved in the transaction, who declined to be identified before the sale is completed. BNP Paribas SA, Goldman Sachs Group Inc, HSBC Holdings Plc and Morgan Stanley are managing the deal.

The BOE also sold bonds of this type in March 2007 and March 2008, it said in a statement on February 27. The central bank holds its own foreign-exchange reserves and sells bonds to finance them under the structure for British monetary policy announced by then Chancellor of the Exchequer, now Prime Minister, Gordon Brown in 1997, Bloomberg News said.

The bonds will be rated Aaa by Moody's Investors Service and AAA by Standard & Poor's, their top rankings, according to the banker.


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