Second Treasury Bonds auction attracts huge demand


The results of the second auction of the UAE Treasury Bonds programme (T-Bonds), represented by the Ministry of Finance (MoF) as the issuer, in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and payment agent, have been announced.

The Monday auction witnessed strong demand through the six primary bank dealers, with bids received worth AED 9.7 billion, and an oversubscription by 6.5 times.

The strong demand was across both tranches with a final allocation of AED 750 million for the 2 year tranche and AED 750 million for the 3 year tranche, with a total of AED 1.5 billion issued in the second auction.

The success is reflected in the attractive market driven prices, which was achieved by a spread of a 27 bps over US Treasuries for two years, and a spread of 25 bps over US Treasuries for 3 years. The second 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, providing safe investment alternatives for investors, strengthening the local debt capital market, developing the investment environment, as well as supporting sustainable economic growth.

The auction is part of the AED9 billion T-Bond issuance programme for 2022 as published in the T-Bonds calendar earlier this year.

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