UK to raise up to 5 bln stg via syndicated gilt

Britain is on track to price its first syndicated gilt in four years on Tuesday with a target size of up to 5 billion pounds, a banker familiar with the deal said on Friday.

The offering, which will carry a 25-year maturity, is Britain's first syndicated bond since 2005.

"The target range is 3 to 5 billion pounds," the source said.

Price guidance is likely to emerge late on Monday following the Bank of England's regular reverse gilt auction. It will be published officially on Tuesday morning when the books open, the source said.

The gilt will carry a 4.5 percent coupon and mature in September 2034. Pricing is likely to reference the 2032 gilt but market participants will also look at the 2036 gilt, currently yielding 4.69 percent, as a reference point.

"I'd expect a backstop bid flat to the 36's," the source said. "Anything rich to that would be a good result."

Unlike other European governments which have frequently used syndicates to sell bonds, Britain until now has relied on auctions. It made an exception in 2005 when it launched the world's first 50-year sovereign inflation-linked bond.

Soaring government borrowing has made Britain keen to explore additional funding route as a way of expanding its investor base.

Britain plans to issue 25 billion pounds of gilts via syndication this fiscal year, meaning it could overtake Greece as the most prolific sovereign borrowing in the syndicated debt market.

Barclays, Goldman Sachs, HSBC and RBS have been appointed to act as bookrunners on next week's deal.