The United Arab Emirates' finance ministry said a second auction of federal treasury bonds would be held on Monday.

The auction size will be 1.5 billion dirhams ($408.43 million) distributed over two tranches: a two-year tranche valued at 750 million dirhams, and a three-year tranche valued at 750 million dirhams, the ministry said on Saturday.

"The re-opening of bonds will be exercised in this auction to increase the volume of individual bonds issued with the aim of improving liquidity in the secondary market", it said.

($1 = 3.6726 UAE dirham)

(Reporting by Alexander Cornwell; Writing by Yasmin Hussein; Editing by Andrew Heavens)