|ROBERT BARR, Associated Press|
Robert Stheeman, chief executive of the Debt Management Office, said a formal consultation with potential buyers was likely to begin in the new financial year, which starts in April. However, he said the final decision will rest with ministers, notably Treasury chief
"The whole purpose of us consulting with the market is to establish whether or not there might be a demand for such instruments, how strong the demand would be and how cost-effective it would be," he said in a telephone interview. "Because we are consulting with the market, that doesn't mean a decision has been made."
At the moment, the
The long-term bonds would include an option for the government to pay off the debt; the bonds are reviewed periodically to assess whether it would be prudent to do so, Stheeman said.
<p> A key question in the consultation is likely to center on how much demand there would be from investors. While hedge funds, which want to see returns on a relatively short-term basis, may not be interested, the longer-term bond issues may appeal to pension funds and insurance companies, which seek out financial security over a longer timeframe.
The oldest perpetual bond was issued in 1853, which refinanced debt issued in the 18th century following the crash of the South Sea Bubble investment mania.
Last year, sales of century bonds included
The low interest rates the
Earlier this week,
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