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 payment agent, announced the results of the first auction of the dirham denominated federal Treasury Bonds of the Government of the United Arab Emirates (T-Bonds), with a benchmark auction size of 1.5 billion Emirati dirhams (circa $400 million), which is part of the 9 billion dirhams T-Bonds issuance program for 2022.
The launch of the 1.5 billion Emirati dirhams UAE T-Bond program witnessed a strong demand through the six primary bank dealers, with bids, received worth 9.4 billion riyals, and an oversubscription by 6.3 times.
The strong demand was across both tranches, with a final allocation of 750 million dirhams for the two years tranche, and 750 million dirhams for the three years tranche, with a total issuance of 1.5 billion dirhams as previously announced.Â
Commenting on the successful launch of the UAE T-bonds programs, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said that the success of the first auction is part of strengthening the UAE’s economic competitiveness.Â
He also stressed that this success is reflected in the attractive market driven prices which achieved a spread of 28 bps over US Treasuries for two years, and a spread of 29 bps over the US Treasuries for 3 years, pointing out that this successful first issuance is a milestone towards building a dirham denominated yield curve and providing safe investment alternatives for investors which contributes to strengthening the local financial market and developing the investment environment.
The lowest bid for the two-year tenor was at 2.88 percent, with the weighted average bids at 2.96 percent and the final uniform coupon rate fixed at 3.01 percent. The lowest bid for the 3-year tenor was at 2.95 percent, with the weighted average bids at 3.09 percent and the final uniform coupon rate fixed at 3.24 percent.
Last year, the UAE raised $4 billion last year through the issuance of multi-tranche sovereign bonds, marking the first time it issued bonds at the federal level.
