Second auction of Treasury Bonds continues to achieve exceptional results
- AED 1.5 billion Treasury Bonds issued in the second auction, as part of the AED 9 billion T-Bonds issuance program for 2022
- Bids worth AED 9.7 billion were received
- Oversubscription by 6.5x
The United Arab Emirates, 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, has announced the results of the second auction of the Treasury Bonds program (T-Bonds), which is part of the AED 9 billion T-Bond issuance program for 2022 as published in the T-Bonds calendar earlier this year.
The second auction of the UAE T-Bond program witnessed a strong demand through the six primary bank dealers, with bids received worth AED 9.7 billion, and an oversubscription by 6.5x. 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 dirhams 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 program 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.
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