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.