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24 February 2024

First auction of Treasury Bonds for 2023 continues to achieve exceptional results

Published
By WAM

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 paying agent, has announced the results of the first auction in the year 2023 of the Treasury Bonds programme (T-Bonds), which is part of the T-Bond issuance programme for this year and as published in the T-Bonds calendar earlier this year.

In 2022, MoF issued T-bonds aggregating to AED 9 billion across tenors of 2 years, 3 years, and 5 years.

The first auction of the UAE T-Bond programme in 2023 witnessed a strong demand through the six primary bank dealers, with bids received worth AED 6.85 billion, and an oversubscription by 6.2x.

The strong demand was across both tranches with a final allocation of AED 550 million for the 2-year tranche and AED 550 million for the 5-year tranche, with a total of AED 1.1 billion for issuance in the first auction in 2023.

The success is reflected in the attractive market driven price, which was achieved by a spread of a 10 bps for the 2-year tranche, and a spread of 15 bps over for the 5-year tranche – both over the applicable US Treasury benchmark.

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

The T-Bonds programme contributes to 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.