The third auction of the UAE's conventional dirham-denominated<a href="https://www.thenationalnews.com/business/economy/2022/04/20/uae-launches-dirham-treasury-bonds-with-an-issuance-size-of-dh15bn/"> treasury bonds </a>was oversubscribed 5.1 times and attracted bids worth Dh7.6 billion ($2.06bn), the Ministry of Finance said on Monday. The auction size of Dh1.5bn was distributed in two tranches of two and three-year notes, valued at Dh750 million each. T-bonds are fixed-rate <a href="https://www.thenationalnews.com/business/banking/2022/02/15/uae-banks-to-benefit-from-planned-interest-rates-increase-by-us-fed-sp-says/">government debt securities</a> that pay semi-annual interest payments until maturity, online financial encyclopaedia Investopedia said. They are also <a href="https://www.thenationalnews.com/business/markets/2022/04/06/emerging-market-stocks-and-bonds-suffer-98bn-outflows-in-march-as-investors-pull-back/">considered relatively risk-free</a>. In the T-bonds auction, the UAE government is represented by the Ministry of Finance as the issuer, in collaboration with the Central Bank of the UAE as the issuing and payment agent. The success [of the auction] is reflected in the attractive market-driven prices, which was achieved by a spread of 16 basis points over US Treasuries for two years, and a spread of 15 bps over US Treasuries for three years, the Ministry of Finance said in a statement. In April, the Emirates announced the launch of a T-bonds issuance programme for 2022 with a benchmark size of Dh1.5bn, as part of plans to <a href="https://www.thenationalnews.com/business/economy/2021/10/13/uae-raises-4bn-through-first-federal-sovereign-bonds/">build a local currency bond market </a>and <a href="https://www.thenationalnews.com/business/economy/2021/10/07/uae-issues-first-ever-sovereign-bonds/">diversify its financial resources</a>. The ministry plans to issue six treasury bond tranches in 2022 with a total value of Dh9bn. Other tranches will be issued with various tenures for up to five years at later dates throughout the year. The first and second auctions of the UAE's conventional dirham-denominated<a href="https://www.thenationalnews.com/business/economy/2022/04/20/uae-launches-dirham-treasury-bonds-with-an-issuance-size-of-dh15bn/"> treasury bonds </a>were oversubscribed <a href="https://www.thenationalnews.com/business/economy/2022/05/11/first-auction-of-dirham-treasury-bonds-oversubscribed-63-times-amid-strong-demand/">6.3 times </a>and <a href="https://www.thenationalnews.com/business/economy/2022/06/20/second-auction-of-uaes-dirham-treasury-bonds-oversubscribed-65-times-amid-strong-demand/" target="_blank">6.5 times</a>, respectively. Six agent banks have been appointed by the Ministry of Finance as primary dealers for participants in the market auction of the T-bonds, including Abu Dhabi Commercial Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, Mashreq Bank and Standard Chartered. “The T-Bonds programme will contribute in building the UAE dirham-denominated <a href="https://www.thenationalnews.com/business/economy/2022/07/28/gulf-central-banks-raise-interest-rates-after-fed-doubles-down-to-tame-inflation/" target="_blank">yield curve</a>, providing safe investment alternatives for investors, strengthening the local debt capital market, developing the investment environment, as well as supporting sustainable economic growth,” the statement said. The third auction followed the practice of reopening the T-Bonds, which helps in building up the size of individual bond issues over time and improves liquidity in the secondary market, the ministry said. The UAE raised $4bn last year through the issuance of multi-tranche sovereign bonds, the first time it issued bonds at federal level. The bond package, which is denominated in US dollars, included conventional medium and long-term 10 and 20-year tranches, as well as 40-year dual-listed Formosa bonds, the ministry said at the time.