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Second auction of Dh1.1b T-Bonds oversubscribed by five times

The second auction of the Dh1.1 billion UAE T-Bond programme in 2023 witnessed a strong demand through the six primary dealers, with bids received worth Dh5.51 billion, and an oversubscription by five times, the Ministry of Finance said on Tuesday.

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“The strong demand was across both tranches with a final allocation of Dh550 million for the 2-year tranche and Dh550 million for the 3-year tranche, with a total of Dh1.1 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 pricing of 5-20bps over the applicable US Treasury benchmark with a 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.

In 2022, MoF issued T-bonds aggregating to Dh9 billion across tenors of two years, three years, and five years.

“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,” said the MoF statement.

— issacjohn@khaleejtimes.com

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