UAE lists first dirham-denominated treasury bond on Nasdaq Dubai

The UAE’s first dirham-denominated treasury bond was listed on Nasdaq Dubai on Thursday, May 12.

Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, rang the market-opening bell to celebrate the listing and circulation of the t-bond issued by the UAE federal government acting through the Ministry of Finance.

The Minister of State for Financial Affairs rang the bell to celebrate the listings of the first Dirham-denominated treasury bonds issued by the UAE Federal Government. pic.twitter.com/WUn5UUh3sM

— Nasdaq Dubai (@NasdaqDubai) May 12, 2022

The inaugural issuance of the local currency treasury bonds worth Dhs1.5bn was 6.3 times oversubscribed during the first auction concluded this week. The issuance forms part of a strategy that includes a series of t-bond issuances to develop the fixed income market in the UAE, official news agency WAM reported.

The Ministry plans to issue six treasury bond tranches this year with a total value of Dhs9bn, where the value of the tranches (two-year and three-year) in the first auction amounted to Dhs1.5bn with a fixed coupon rate of 3.01 per cent and 3.24 per cent, respectively. In contrast, other tranches will be issued with various tenures for up to five years at later dates throughout the year.

The issuance of AED 1.5 billion is part of an ambitious strategy to develop debt capital markets, providing investors with lucrative opportunities and proper gauge of yield curve.

— Nasdaq Dubai (@NasdaqDubai) May 12, 2022

“The Federal Treasury Bond Programme contributes to revitalising the local financial and banking sector and providing alternative financing opportunities for investors, reflecting the strength of economic development indicators, the stability of the financial system, and the economy’s resilience,” added Al Hussaini.

The Ministry of Finance had listed $4bn bonds as its inaugural sovereign bonds issuance on Nasdaq Dubai in October 2021. The latest t-bond listing reinforces Nasdaq Dubai’s position, increasing its domestic and international fixed income listings in the Middle East to $102bn.

Six agent banks have been appointed by the Ministry of Finance as primary dealers for participants in the primary market auction of t-bonds and to actively develop the secondary market. These include Abu Dhabi Commercial Bank, Emirates NBD Bank, First Abu Dhabi Bank, HSBC, Mashreq Bank, and Standard Chartered.

Read: UAE to launch domestic dirhams Treasury Bonds worth Dhs1.5bn