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  • 16-03-23

    UAE raises USD300m from second auction of conventional dirham-denominated treasury bond issuance

    (MENAFN) The United Arab Emirates (UAE) has raised 1.1 billion dirhams (USD300 million) from the second auction of conventional dirham-denominated treasury bond issuance. The auction was conducted by the UAE's Ministry of Finance, in association with the Central Bank of the UAE as the issuing and paying agent. The T-bonds are fixed-rate government debt securities that pay interest payments twice a year until maturity, according to online financial encyclopedia Investopedia.

    The sale of the T-bonds was five times oversubscribed, demonstrating strong investor demand through six primary dealers. The two and three-year tranches of 550 million dirhams each received bids worth 5.51 billion dirhams.

    T-bonds are widely considered to be risk-free, making them an attractive investment option for investors. The UAE's successful auction of T-bonds reflects the country's continued efforts to diversify its funding base.

    The Finance Ministry noted that the T-bonds achieved a pricing of 5 to 20 basis points over the applicable US Treasury benchmark with similar maturity. This year's dual-tranche deal received strong investor demand, indicating investor confidence in the UAE's economy and financial stability.

    The successful auction of conventional dirham-denominated treasury bond issuance demonstrates the UAE's commitment to diversifying its funding base and reflects its strong economic and financial position. The oversubscribed auction and attractive market-driven pricing of the T-bonds serve as a testament to the country's continued efforts to attract investment and ensure long-term financial sustainability.

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