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UK central government debt. It may be dated (redeemable) or undated.
1. ''Financial markets - financial instruments - UK central government debt.''


Undated gilts are perpetual debt, paying a fixed periodic coupon but having no final redemption date.
Most commonly in UK usage, UK central government debt. 
Gilt yields are conventionally quoted in the UK markets on a semi-annual basis.
 
 
Also known as Gilt-edged securities, or Gilt-edged stock.
 
 
 
:<span style="color:#4B0082">'''''Example 1: Short-dated Conventional gilt'''''</span>
 
:An example of a short-dated conventional UK gilt was the 2% Treasury Gilt 2020.
 
:Each £100 gilt repaid £100 to the owner on 22 July 2020.
 
:It also paid interest on 22 July 2020, calculated at 2% per year. It was originally issued in 2014.
 
:It paid a predetermined fixed amount of interest (2% per year) throughout its whole life.
 
:It was repaid at a fixed amount of £100 at its maturity on 22 July 2020.
 
:Whatever happened to inflation before final maturity, these amounts did not change.
 
 
:<span style="color:#4B0082">'''''Example 2: Long-dated Conventional gilt'''''</span>
 
:A very long dated conventional gilt is the 4% Treasury Gilt 2060.
 
:It will pay interest at 4% per year until 2060.
 
 
:<span style="color:#4B0082">'''''Example 3: Index-linked gilts'''''</span>
 
:Index-linked gilts pay out larger amounts, the higher the rate of inflation.
 
:The 'index' they are linked to is the UK Retail Prices Index (RPI).
 
:About 25% of UK gilts are index-linked, with 75% being conventional.
 
 
Historically, gilts were printed on gilt-edged paper (heavy bond paper with a metallic edge, usually gold-leaf or gold paint).
 
The heavy expensive looking paper was designed to give confidence in the promise.
 
 
2. ''Financial markets - central government debt.''
 
The term 'gilt' is also used to refer to the debt of certain other central governments, especially US government treasury securities.


Also known as Gilt-edged securities.


== See also ==
== See also ==
* [[Bill]]
* [[Bond]]
* [[Bond]]
* [[Bond vigilante]]
* [[Bund]]
* [[Debt Management Office]]
* [[Exempt gain]]
* [[Exempt gain]]
* [[Risk free rate of return]]
* [[G+]]
* [[High-yield]]
* [[Index-linked gilt]]
* [[Investment grade]]
* [[Liquid]]
* [[Liquidity]]
* [[Paper]]
* [[Risk asset]]
* [[Risk-free asset]]
* [[Risk-free rate of return]]
* [[Risk-off]]
* [[Risk-off asset]]
* [[Risk-on]]
* [[Semi-annual rate]]
* [[Semi-annual rate]]
* [[Share]]
* [[Sovereign]]
* [[Stock]]
* [[Stock exchange]]
* [[Swap spread risk]]
* [[Tap stock]]
* [[Treasury]]
* [[Treasury securities]]
* [[United Kingdom]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_products_and_markets]]

Latest revision as of 05:46, 10 February 2024

1. Financial markets - financial instruments - UK central government debt.

Most commonly in UK usage, UK central government debt.


Also known as Gilt-edged securities, or Gilt-edged stock.


Example 1: Short-dated Conventional gilt
An example of a short-dated conventional UK gilt was the 2% Treasury Gilt 2020.
Each £100 gilt repaid £100 to the owner on 22 July 2020.
It also paid interest on 22 July 2020, calculated at 2% per year. It was originally issued in 2014.
It paid a predetermined fixed amount of interest (2% per year) throughout its whole life.
It was repaid at a fixed amount of £100 at its maturity on 22 July 2020.
Whatever happened to inflation before final maturity, these amounts did not change.


Example 2: Long-dated Conventional gilt
A very long dated conventional gilt is the 4% Treasury Gilt 2060.
It will pay interest at 4% per year until 2060.


Example 3: Index-linked gilts
Index-linked gilts pay out larger amounts, the higher the rate of inflation.
The 'index' they are linked to is the UK Retail Prices Index (RPI).
About 25% of UK gilts are index-linked, with 75% being conventional.


Historically, gilts were printed on gilt-edged paper (heavy bond paper with a metallic edge, usually gold-leaf or gold paint).

The heavy expensive looking paper was designed to give confidence in the promise.


2. Financial markets - central government debt.

The term 'gilt' is also used to refer to the debt of certain other central governments, especially US government treasury securities.


See also

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