(Bloomberg) -- The UK received record demand for a gilt sale on Tuesday, after it offered a larger-than-expected discount on the notes.

The £11 billion ($14 billion) bond offering attracted £110 billion in orders, surpassing the previous record of over £100 billion for the UK’s debut green bond in 2021. Analysts said pricing for the 10-year offer was attractively set at four basis points over a comparable gilt.

The UK Debt Management Office plans to issue a total of £265 billion in government bonds this fiscal year, which would be its biggest borrowing program ever bar the pandemic response of 2020-2021. The new issuance comes along full-swing sales from the Bank of England, which could take the total stock of debt the market will have to digest this year to an all-time high.

Tuesday’s sale premium was a “bit higher compared to expectations,” said Emmanouil Karimalis, a strategist at UBS Group AG. He said the market was expecting two-to-three basis points.

The huge demand has emerged after yields on gilts have climbed this year as markets have pared expectations for global monetary tightening. While the Bank of England is expected to continue to hold interest rates at a meeting this month ahead of an election in July, this could be one of the last gilt syndications before it starts to cut borrowing costs.

Money markets currently favor a quarter-point cut by September. Data earlier Tuesday backed the case for a cut by showing UK unemployment unexpectedly rose to the highest in more than 2 1/2 years while pay pressures eased. That led to gains in UK gilts, with the 10-year yield down 3 basis points at 4.29%.

While Tuesday’s orderbook was a record, it covered the deal around 10 times, a lower ratio than seen in November and January, of 13 times. 

The bookrunners on the gilt sale are Barclays Plc, Citigroup Inc., Deutsche Bank AG, Lloyds Banking Group Plc, NatWest Markets Plc and Royal Bank of Canada. 

(Updates throughout.)

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