Sixth auction of T-Bonds witnesses strong demand

The UAE, represented by the Ministry of Finance (MoF) as the issuer, in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and paying agent, has announced the results of the sixth auction of the Treasury Bonds (T-Bonds) programme, which is part of the Dhs9 billion T-Bond issuance programme for 2022 as published in the T-Bonds calendar earlier this year.

The sixth auction of the UAE T-Bond programme witnessed a strong demand through the six primary bank dealers, with bids received worth Dhs6.72 billion, and an oversubscription by 4.5x.

The strong demand was across both tranches with a final allocation of Dhs750 million for the 3-year tranche and Dhs750 million for the 5-year tranche, with a total of Dhs1.5 billion issued in the auction.

The success is reflected in the attractive market driven price, which was achieved by a spread of 18 bps over US Treasuries for 3 years, and a spread of 30 bps over US Treasuries for 5 years.

The sixth auction followed the practice of re-opening the T-Bonds which helps in building up the size of individual bond issues over time and improve liquidity in the secondary market.

The T-Bonds programme will contribute in building the UAE dirham denominated yield curve, strengthening the local debt capital market, developing the investment environment, providing safe investment alternatives for investors, as well as supporting sustainable economic growth.