The $4 Trillion UK Bond Salesman Has Left the Building

Robert Stheeman quietly stepped down as head of the UK Debt Management Office shortly before the recent British election. As the country’s chief government bond salesman, his role was to keep borrowing costs to a minimum and the gilt market as frictionless as possible — no simple task as the firehose of sovereign debt supply has become ever stronger. Knighted in 2016 for his public service, he’s relatively anonymous outside the world of fixed income. But the nation is literally in his debt.

Since 2003, he’s overseen the sale of £3.3 trillion ($4.2 trillion) of gilts in more than 1,000 primary dealer auctions and nearly 100 syndicated bond sales, communicating with traders and investors alike to balance supply and demand and keep the Treasury happy. Last month, a record £11 billion 10-year syndicated gilt sale secured a monster £110 billion orderbook. Most debt is raised in regular auctions via the 18 banks that form the panel of gilt-edged market makers; but a fifth of supply now is sold using a syndicate of investment banks to build an investor book, allowing the DMO to issue in larger sizes and with longer maturities — an innovation overseen by Stheeman.