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UAE: Second auction of T-Bonds sees bids worth AED 9.7 bn

Oversubscription by 6.5x
UAE: Second auction of T-Bonds sees bids worth AED 9.7 bn
The UAE Ministry of Finance

The second auction of the UAE Treasury Bonds (T-Bond) program witnessed a strong demand through the six primary bank dealers, with bids, received worth 9.7 billion dirhams, and an oversubscription by 6.5x. The strong demand was across both tranches with a final allocation of 750 million dirhams for the 2-year tranche and 750 million dirhams for the 3-year tranche, with a total of 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 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 improves liquidity in the secondary market.

The second auction is part of the 9 billion dirhams T-Bond issuance program for 2022 as published in the T-Bonds calendar earlier this year. 

The T-Bonds program will contribute to building the UAE AED-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.