The fifth round auction of the UAE T-Bond (Treasury bond) issue evinced strong response from the market, with the UAE central bank receiving bids worth AED7.57 billion.
The issue was oversubscribed by five times.
The strong demand was seen across both tranches, with a final allocation of AED750 million for the 2-year tranche and AED750 million for the 3-year tranche, totaling AED1.5 billion in the latest auction round.
The success of the issue is said to be due to the attractive market driven price – a spread of 17 basis points (bps) over US Treasuries for two years, and a spread of 8 bps over US Treasuries for 3 years.
The fifth auction round was part of the UAE central bank’s AED9 billion T-Bond issuance programme for 2022.
The fifth auction round followed re-opening of the T-Bonds to enable building up the size of individual bond issues over time and improving liquidity in the secondary market.
The T-Bonds programme is expected to improve the UAE dirham-denominated yield curve, leading to strengthening of the local debt market.
It is also expected to augment the domestic investment environment, besides providing safe investment alternatives for investors, as well as supporting sustainable economic growth.
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