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The sterling market showed signs of coming to life in an otherwise quiet summer period on Tuesday, with an increased deal from GE Capital, a tap by the European Investment Bank and issues from financial institutions.

GE Capital, a unit of US industrial conglomerate General Electric, sold a larger than expected £400m five-year bond on Tuesday, according to lead managers on the deal.

GE Capital already had a 2009 sterling issue outstanding, a £150m issue from 1999, but after the Triple A rated issuer created new funding entities last year, it wanted to create a new benchmark.

The company originally planned to sell between £250m and £300m of the bond, but the size was increased after the order book approached £500m.

The bond, which pays a coupon of 5.5 per cent, matures in December 2009 and the deal was pricedto yield 49 basis points above the comparable Gilt, at the tight end of its 50bp area price guidance.

By comparison, the old due 2009 issue was trading at 48bp over Gilts and the longer due 2010 issue at 53bp over Gilts.

With the euro market all but shut for business due to the summer holidays, the 5.5 per cent coupon deal attracted interest from European and Asian accounts, although the majority of investors were still based in the UK, said Stuart Montgomery at the Royal Bank of Scotland, which managed the deal with UBS.

Nationwide, the UK building society, increased its 5.625 per cent due December 2007 sterling bond by £100m to take the new total to £300m, in a deal managed by RBS and HSBC.

Citigroup, the US banking group, tapped its floating-rate note issue maturingin 2009 by £275m to takethe new total to £700m.The tap was priced to yield 12bp over the sterling Libor rate and about 30 per centof investors came from outside the UK.

The bank had initially said that it would raise a minimum of £200m from the deal.

The European Investment Bank, the financing vehicle of the European Union, added a further £150m to its 5.625 per cent due 2032 sterling bond, taking the new total to £1.675bn.

UBS was sole lead manager for the EIB, whichis rated Triple A by allthe rating agencies.

The EIB also tapped its 2009 Hungarian forint issue by Ft4bn, taking the new total to Ft24bn, a day after it raised a further Ft4bn by tapping its 2007 bond.

In the dollar market, Gillette, the manufacturer of razor blades and personal hygiene products, sold $300m of a bond with a maturity of September 2009.

The issue was priced with a coupon of 3.8 per cent,a yield spread of 40bpabove the comparable US Treasury. Gillette is rated Aa3 by Moody's Investors Service, three levels below Triple A, and Standard & Poor's has assigned thecorresponding Double A minus rating.

Bank of America and Morgan Stanley were lead managers for the deal, which was priced on Monday night.

Copyright The Financial Times Limited 2017. All rights reserved.

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