Post by : Bianca
Haleem
In a successful initiative led by the UAE Ministry of Finance (MoF) and the Central Bank of the UAE (CBUAE), the May 2026 auction of dirham-denominated Treasury Bonds (T-Bonds) culminated in a total raise of AED1.1 billion.
This auction forms part of the annual issuance program for T-Bonds outlined by the Ministry of Finance, with the Central Bank serving as the issuing and payment representative.
Marked by strong interest from primary dealers, bids totaled AED4.74 billion, showcasing an oversubscription rate of 4.3 times. This underscores the enduring investor confidence in the resilience of the UAE’s financial framework.
The issuance comprised two tranches of T-Bonds, maturing in September 2027 and January 2031.
Ultimately, the auction produced competitive pricing, with a Yield to Maturity (YTM) of 4.03 percent for the September 2027 tranche and 4.30 percent for the January 2031 tranche. Yields were recorded with a tight spread of up to 14 basis points over similar U.S. Treasury bonds during issuance.
Additionally, it was confirmed that these T-Bonds are listed on Nasdaq Dubai, enhancing liquidity and trading prospects in the secondary market.
This marks the third successful bond issuance by the UAE amidst regional challenges, totaling AED3.3 billion raised and over AED14.5 billion in bids across the three issuances, with pricing spreads ranging from 6 to 23 basis points for maturities from 18 months up to 7 years.
The UAE's T-Bond and T-Sukuk programs are vital to the establishment of a nuanced dirham-denominated yield curve, offering secure investment channels, fortifying the local debt capital market, nurturing the investment climate, and aiding in the UAE’s long-term economic sustainability.
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