Five-year tranche of UAE Treasuries receives bids worth Dhs 8.6 billion in fourth auction


The United Arab Emirates, represented by the Ministry of Finance (MoF) as issuer, together with the Central Bank of the United Arab Emirates (CBUAE) as issuing and paying agent, announced the results of the fourth sale auction of the Treasury bond program (T-Bonds), which is part of the Dhs 9 billion T-Bond issuance program for 2022.

The fourth auction, which saw the first issue of five-year Treasury bonds, saw strong demand through all six major banking brokers, with bids received worth $8.6 billion. Dhs and a 5.7x oversubscription, according to the state news agency. W.A.M..

The performance is reflected in attractive market-determined prices, which were achieved by an eight basis point (bp) spread over US Treasuries for two years and a 20 basis point spread over US Treasuries. of the US Treasury for five years.

Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said the new five-year treasury bills will help strengthen the local debt capital market and build the UAE dirham-denominated yield curve. He added that establishing an active market for treasury bill trading also helps increase efficiency in pricing and capital allocation and supports the development of a broader capital market. It also offers foreign investors safer alternatives to invest in the local currency.

“T-Bonds support the country’s financial and economic policies aimed at achieving comprehensive and sustainable economic development. They also help boost the financial market and credit structure, and create a multi-investment environment that helps make the UAE an ideal investment destination, especially as the country enjoys a solid rating. credit by international credit agencies, which has consolidated its position as one of the most competitive economies internationally,” said Al Hussaini.

Khaled Mohamed Balama, Governor of the CBUAE, explained: “The issuance of five-year Treasury bonds in the national currency is an advanced step in the plans and directions of the UAE towards the diversification of capital markets activities, the construction of the UAE dirham-dominated yield curve and achieving the objectives of the monetary framework in dirhams.

“We are confident in the infrastructure we have established, which would enhance the UAE’s ability to develop the financial sector in line with monetary policies and strategic plans. We are pleased with the positive outcome of our partnership with the Ministry of Finance in developing the financial market and improving the country’s investment environment.

In May, the United Arab Emirates, represented by the MoF as issuer, together with the CBUAE as issuing and paying agent, issued the United Arab Emirates Government Dirham-denominated T-Bonds (T-Bonds). Bonds), in two and three years. mandates. Six agent banks have been appointed by the MoF as primary dealers for participants in the T-Bond auction in the primary market and to actively develop the secondary market. These banks are Abu Dhabi Commercial Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, Mashreq Bank and Standard Chartered.

The Ministry of Finance and the CBUAE have worked closely with all relevant government entities and international financial organizations to ensure the application of international best practices in the T-Bonds program.

In addition, in June, the United Arab Emirates announced that it would issue two-tranche benchmark size bonds denominated in US dollars.

Read: UAE to issue dual-tranche dollar-denominated sovereign bonds


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