UAE Business: $300m in Treasury Bonds issued in the first auction of 2023 – Gulf Digital News

UAE Business: $300m in Treasury Bonds issued in the first auction of 2023 – Gulf Digital News

The UAE has issued AED1.1 billion ($300 million) in the first auction of Treasury Bonds (T-Bonds) in 2023, which saw tremendous demand. The strong demand was across both tranches with a final allocation of AED550 million for the 2-year tranche and AED550 million for the 5-year tranche.

The auction witnessed a strong demand through the six primary bank dealers, with bids received worth AED6.85 billion, and an oversubscription by 6.2 times.

The bonds were issued by the Ministry of Finance (MoF) as the issuer, in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and paying agent

AED9 billion in T-Bonds in 2022

In 2022, MoF issued T-bonds aggregating to AED9 billion across tenures of 2 years, 3 years and 5 years.

The success this year is reflected in the attractive market driven price, which was achieved by a spread of a 10 bps for the 2-year tranche, and a spread of 15 bps over for the 5-year tranche – both over the applicable US Treasury benchmark.

This auction followed the practice of re-opening the T-Bonds which helps in building up the size of individual bond issues and improve liquidity in the secondary market.

The T-Bonds programme contributes to building the UAE-dirham-denominated yield curve,