UAE skyline
The strong demand was across both two-year and three-year tranches. Image Credit: Pexels

The third auction of UAE’s Dh1.5 billion treasury bonds received bids worth Dh7.6 billion, an oversubscription by 5.1x, it was announced on Monday.

The auction is part of UAE’s Dh9 billion T-bonds issuance programme for 2022.

The strong demand was across both tranches with a final allocation of Dh750 million for the 2-year tranche and Dh750 million for the 3-year tranche, the Ministry of Finance said in a statement.

The success is reflected in the attractive market-driven prices, which was achieved by a spread of a 16 bps over US Treasuries for two years, and a spread of 15 bps over US Treasuries for three years. The third auction followed the practice of re-opening the T-Bonds which helps in building up the size of individual bond issues over time and improve liquidity in the secondary market.

The T-Bonds program will contribute in building the UAE dirham 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.