Euroclear contributes to UAE’s launch of domestic dirhams T-Bonds alongside Bloomberg

T-Bonds aim to boost foreign and local investment, as Euroclear follows up involvement in similar initiatives in Chile, Taiwan, China and Japan with UAE launch. 

By Jonathan Watkins

The United Arab Emirates (UAE) has announced the launch of conventional AED denominated Treasury Bonds in partnership with Euroclear and Bloomberg. 

The securities will be auctioned and traded through Bloomberg’s Auction System and settled through a local platform, compliant with international standards, built and operated by Euroclear Bank. 

For Euroclear, this partnership follows similar initiatives in Chile, Taiwan, China and Japan in recent years. 

Issuing the T-Bonds in local currency will contribute to boosting foreign investment, building a local currency bond market and boosting the local financial and banking sector.  

“The issuance of the T-Bonds by the Ministry of Finance to establish a mid-term yield curve comes as the next step forward in the development of the local capital market,” said Sudip Chatterjee, head of global capital markets at Euroclear.   

“This is made possible thanks to the launch of the innovative end-to-end platform and the creating of a short-term yield curve by the Central Bank early last year. As a long-term partner to the UAE, we are proud of our continued collaboration with the Ministry of Finance and the Central Bank to develop the capital market which will have an impact on other domestic activities.” 

Subject to market conditions, the first auction date to be held in May 2022 is expected to be announced soon, followed by a series of periodical auctions. 

Conventional T-Bonds will be denominated in UAE dirhams to develop the local bonds debt market and ultimately, the aim is to help develop the mid-term yield curve. The Securities will be issued initially in 2/3/5-year tenures; followed by a 10-year bond at a later date.  

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