UAE to Start Dirham Debt Sales Next Month to Build Local Market
UAE to Start Dirham Debt Sales Next Month to Build Local Market
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The United Arab Emirates expects to start sales of dirham-denominated Treasury bonds in May in a bid to build its local financial and banking sectors.
In the UAE the sheikhdoms set separate budget policies and tend to issue their own debt, but the federation issued its first-ever dollar bond last year. The country also received its initial credit rating from Fitch Ratings in 2020, which placed it in the fourth-highest investment grade.
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The bond program “will enable market participants in the UAE to maintain a transparent, single, diversified and sustainable pool of dirham liquidity,” Khaled Mohamed Balama, governor of the Gulf nation’s central bank, said in a statement Wednesday. The issuance is “the next step forward in the development of the local capital market.”
The dirham securities worth 1.5 billion dirhams ($408 million) will be issued initially in two, three and five-year tenures, followed by a 10-year bond at a later date. A date for the first auction will be announced soon, the bank said.
The Finance Ministry has assembled six local and international banks to participate in the primary market auction, including Abu Dhabi Commercial Bank PJSC, Emirates NBD PJSC, First Abu Dhabi Bank PJSC and Standard Chartered Plc.
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