Britain creates special repo facility for gilts

LONDON (Reuters) - The Debt Management Office announced a special repo facility on Friday to promote the orderly functioning of the gilts market.

It said from Monday, gilt-edged market makers would be able to request the creation of any non-rump, conventional gilt with a residual maturity of less than 5 years for repo purposes.

Gilts will be made available for terms of one week at a time, at Bank Rate minus 150 basis points.

There will be no upper limit on requests. All operations will be subject to haircuts and margining arrangements at the Debt Management Office's discretion.

(Reporting by Christina Fincher and Golnar Motevalli)