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25 April 2024

Second auction of Treasury Bonds in 2023 records bids worth AED5.51bn

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 second auction in 2023 of the Treasury Bonds programme (T-Bonds), which is part of the T-Bond issuance programme for 2023 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 second auction of the UAE T-Bond programme in 2023 witnessed a strong demand through the six primary dealers, with bids received worth AED 5.51 billion, and an oversubscription by 5.0x. 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 3-year tranche, with a total of AED 1.1 billion issued in the auction.

The success is reflected in the attractive market driven price at the time of the auction; the T-Bonds achieved a pricing of 5-20bps over the applicable US Treasury benchmark with similar maturity. This auction followed the practice of re-opening the T-Bonds, which helps in building up the size of individual bond issues over time and improves liquidity in the secondary market.

The T-Bonds programme will contribute 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.