The sixth auction of the UAE's dirham-denominated treasury bonds was oversubscribed by 4.5 times and received bids worth 6.72 billion ($1.82 billion), the finance ministry government said on Monday.

The latest auction, which is part of the 9 billion dirhams T-Bond issuance program for 2022, received strong demand through the six primary bank dealers. The bonds had a spread of a 18 basis points (bps) over US Treasuries for three-year bonds, and a spread of 30 bps over US Treasuries for the five-year tranche.

The demand was across both tranches with a final allocation of AED750 million for the three-year tranche and AED750 million for the five-year tranche, with a total of AED 1.5 billion dirhams issued in the auction, the ministry said in a statement.

The sixth auction followed the practice of re-opening the T-Bonds, which helps in building up the size of individual bond issues over time and improve liquidity in the secondary market.

The UAE government's T-Bonds program is expected to contribute to building the UAE dirham-denominated yield curve while strengthening and deepening the local debt capital market.

(Writing by Brinda Darasha; editing by Seban Scaria)