UK - The National Association of Pension Funds has backed the UK government's strategy to issue more long-dated, indexed-linked gilts and has called for a range of distribution methods to be available to help meet pension funds needs.
It said the government would obtain access to funding at low rates of interest - lower than those available at shorter durations.
At the same time, it said institutions such as pension funds and insurance companies would benefit from greater availability of a strategic asset and reduced pressure on their balance sheets.
In addition, the NAPF believed companies would have greater access to debt finance at short and medium durations with less "crowding out" by government borrowing.
Its response to the Debt Management Office's consultation on supplementary distribution methods for issuing long-dated gilts also recommended using a combination of mini-tenders, syndication and direct placement of gilts in order to ensure that pension funds' demand for long-dated gilts could be successfully met.
The NAPF additionally said the DMO should have a more flexible remit which would allow it to respond better to pension fund demand for these gilts.
NAPF chief executive Joanne Segars, said: "Both pension funds and the government would benefit from the greater issuance of long-dated, index-linked gilts and we welcome the DMO's commitment to exploring different mechanisms for issuance.
"We are keen to work with the DMO to help make sure that distribution methods meet the needs of our members and help protect pension provision in the long term."
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