Updates with Debt Management Office statement

LONDON, June 9 (Reuters) - Britain sold £9 billion ($12.04 billion) of 15-year government bonds at a syndicated sale on Tuesday, the country's debt agency said, but the yield that will be paid to investors is one of the highest on record, as the cost of government borrowing rises.

The debt was issued with a yield of 5.3454%, the highest on record for a 15-year gilt sold via syndication since the UK Debt Management Office was created in 1998 and was only exceeded a handful of times at sales of gilts with different maturities.

The yield on the January 2041 gilt GBT5Q41=, GB15YT=RR is up sharply from 4.957% when it was last sold via syndication in January, before the Iran war pushed up borrowing costs in Britain and elsewhere on concerns about higher inflation.

Last month the gilt's yield in the secondary market exceeded 5.6%, the highest for a 15-year gilt since August 1998.

Investors submitted £115.8 billion in orders for the gilt at Tuesday's syndication, the DMO said, as they repeated the pattern at gilt syndications of ordering multiple times the value of the likely amount to be sold.

"Today's transaction serves as a further demonstration of the resilience of the gilt market, notwithstanding the volatile global market backdrop," DMO Chief Executive Jessica Pulay said.

Domestic investors accounted for 67% of demand, similar to the last sale in January but relatively low by the historic standards for syndications, showing the increased role of foreign investors in financing British government borrowing.

Citi, Deutsche Bank, J.P. Morgan, RBC Capital Markets and Lloyds acted as joint leads on the transaction.

In January, the DMO sold £7.5 billion of the same bond, three months after an initial £9 billion sale also via syndication, as it sought to establish its status as a new 15-year benchmark on the gilt curve.

($1 = 0.7473 pounds)