Receipt of bids worth 8.6 billion dirhams... and the volume of subscription exceeds 5.7 times
The UAE issues the first 5-year federal treasury bonds
The United Arab Emirates, represented by the Ministry of Finance, as the issuer and in cooperation with the Central Bank, as the issuing and paying agent, announced the results of the fourth auction for the issuance of federal treasury bonds (T-Bonds) denominated in UAE dirhams, which witnessed the first issuance of five-year federal treasury bonds. .
The fourth auction of the Treasury Bonds Program recorded strong demand from the six main distributors banks, as bids worth 8.60 billion dirhams were received, exceeding the volume of subscription by 5.7 times.
The success is reflected in the market-driven premium rates, which were achieved by a difference of eight basis points on the US two-year Treasuries, and a spread of 20 basis points on the US five-year Treasuries.
The Minister of State for Financial Affairs, Muhammad bin Hadi Al-Husseini, indicated that “issuing five-year federal treasury bonds in the national currency comes as a continuation of efforts to support the development of the local debt market in the Emirati dirham, building a yield curve denominated in the local currency, and establishing an active market for the trading of federal bonds, which contributes to Raising the efficiency of pricing and capital allocation, in addition to creating an active market for the trading of federal securities that supports the development of the broader capital market, provides safer investment assets, and provides promising investment opportunities for international investors to invest in the local currency.
He explained that "the Treasury Bonds Program also contributes to supporting the government's ability to cover future financing requirements, participate in diversifying sources of financing and reduce dependence on foreign capital markets."
He said: "Government treasury bonds contribute to supporting the country's financial and economic policies aimed at achieving comprehensive and sustainable economic development, strengthening the financial market and credit structure, and creating a multi-investment environment that contributes to making the UAE an ideal destination for investors, as the country enjoys a high-level creditworthiness and a strong evaluation by international credit agencies, which has cemented its position as one of the most internationally competitive economies.
In turn, the Governor of the Central Bank, Khaled Muhammad Balama, stressed: “The issuance of five-year federal treasury bonds in the national currency constitutes a new advanced stage in the UAE’s plans and strategic directions towards diversifying the activities of capital markets, developing the return trend denominated in dirhams, and achieving the objectives of the new monetary framework for the dirham. .
It also confirms, at the same time, the strength and stability of the financial system, and the confidence of local and international investors in the country's financial system, thus enhancing its position as a global financial center.
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