Types of Gilts Issue

So what types of issues of the bonds that are so important to raise money for the government are there?

A natural enough question, and the answer is that there are several methods of issue.

The first of these is the tender, or a so called Dutch Auction... investors say how many they want and what price they will pay, and all applications at the highest price needed to account for nominal issue value is taken. A common price is given to all bidders - that is the lowest accepted bid price.

There is also the competitive auction type of issue which moves in the familiar way as an auction that you go to buy antiques.

Another option is the so called taps. This is with smaller quantities that are issued from time to time.

So those are the main types of gilt issue out there to the financial money markets from the government; there is also something called a strip market but is not important for this article.

Secondary Bond Market Explained
Bonds and Bullets
Bond terms explained: Covenant
The Primary Bonds Market
Liquidation of a Company: Priorities

Types of Gilts Issue

Related Articles