LONDON--The U.K. Debt Management Office sold its first government bond of 2017, re-opening the 1.75% 2037 gilt and increasing it by 2.25 billion pounds ($2.76 billion) Thursday.

The auction was 1.69 times oversubscribed and was struck at an average yield of 1.97%.

It also pushed the issue's size to GBP4.96 billion, thereby making it eligible for Bank of England purchases.

Analysts at Societe Generale expected demand from investors looking to build inventory before the Bank of England resumes government bond purchases next week following its holiday break.

The deal also kick-starts a busy month of U.K. government bond issuance which features four more auctions and a syndicated transaction. The schedule reflects the U.K. government's increased borrowing requirements, as outlined in its Autumn Statement.

Write to Tasos Vossos at tasos.vossos@wsj.com.

(END) Dow Jones Newswires

January 05, 2017 06:45 ET (11:45 GMT)

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