Gilts

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Gilts

British and Irish government securities. Blue Chip.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Gilt Edged Bond

A private-issued, investment grade bond. Only blue chip companies issue gilt edged bonds and, for that reason, they have high ratings. Gilt edged bonds are considered sufficiently low-risk that the law allows banks to invest in them. In addition to being low-risk, investment-grade bonds are low-return, greatly reducing the cost on the issuer. They are considered the next safest bond to a Treasury security.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
London: UK government bonds risk losing their status as the least bad performers in Europe as the Bank of England (BOE) moves closer to ending emergency stimulus.
Bank of Scotland reported surging investor confidence in gold and UK Government bonds, with European assets suffering.
"The low yields on UK government bonds and high levels of some unnecessary liquidity have led to use of a wider range of bond or bond-like assets to match cash flows in," says Tim Giles, partner at Aon Hewitt.
Summary: UK government bonds fell for a fourth week as signs the economy is gathering momentum fuelled speculation the Bank of England will raise interest rates sooner than policy makers forecast.
The high price of UK Government bonds (gilts) today also reflects the unique benefits that they offer.
Gold, cash and UK Government Bonds will be, and indeed already are seen as, safe havens, and the pound will strengthen probably against all but the new deutschmark (which will revalue very substantially) and the US dollar.
"We expect a move towards more realistic pricing in 2012, which will only be accentuated further in the City when the forecast job cuts in the banking and financial sector kick-in.'' Investment volumes in the market as a whole in Q4 fell by 16% from Q4 to pounds 6.8bn as investors sought the relative safety of UK government bonds - this downward shift can be attributed to many factors, primarily the Eurozone debt crisis holding back investment.
Gilts have in recent months benefited from investors seeking the relative safety of UK government bonds as there is still no resolution in sight to the eurozone debt crisis.
Santander Global Banking & Markets (SAN.MC) (NYSE: STD) will become a primary dealer of UK government bonds, known as gilts, from August 19, 2010 Dow Jones has reported.
This is currently well ahead of its 30-year average (3.1 per cent) and the return on cash and UK government bonds. After a period of financial prudence, many companies have come through the recession in rude health.
Summary: The prospect of a hung parliament has pegged back gains for sterling and UK Government bonds.
Therefore, this article will use recent data from the UK government bond markets to estimate the inflation risk premium embedded in nominal UK government bonds.(16)