Ministry of Finance, acting as issuer and in collaboration with the Central Bank of the UAE as issuing and payment agent, launched the first 7-year tranche of UAE dirham-denominated Islamic Treasury Sukuk (T-Sukuk) valued at AED550 million. Notably, this marks the longest tenor issued under the programme to date.
The move reflects a strategic effort to extend and deepen the UAE dirham yield curve. Therefore, the issuance supports the continued development of the domestic debt market.
Strong Demand in February Auction
The new 7-year tranche attracted demand of approximately AED3.1 billion, nearly six times the issuance size. As a result, the offering underscored investor confidence in the resilience of the national economy and the strength of the Islamic finance sector.
This followed the successful completion of the February auction of UAE dirham-denominated Islamic Treasury Sukuk, which raised a total of AED1.1 billion. Moreover, the issuance forms part of the Islamic Treasury Sukuk Programme for 2026, as published on the Ministry’s official website.
The auction drew strong participation from eight primary dealers across two tranches maturing in May 2030 and February 2033. Consequently, total bids reached AED5.88 billion, reflecting an oversubscription ratio of 5.3 times, while the 7-year tranche alone recorded oversubscription of around six times. This robust appetite highlights sustained confidence in the UAE’s credit profile and Islamic finance framework.
Competitive Pricing and Market Development
The auction achieved competitive, market-driven pricing. The May 2030 tranche recorded a yield to maturity (YTM) of 3.53 percent, whereas the February 2033 tranche achieved a YTM of 3.779 percent. Additionally, both tranches were priced below par relative to comparable US Treasuries at the time of issuance.
Furthermore, the Sukuk are listed on Nasdaq Dubai under the UAE Treasury Islamic Sukuk Programme, thereby enhancing secondary market access for investors.
The Islamic T-Sukuk programme plays a central role in strengthening the dirham-denominated yield curve. In addition, it provides secure investment instruments for a broad investor base. Consequently, the programme reinforces the local debt capital market, supports the broader investment ecosystem, and advances the UAE’s long-term economic sustainability and growth objectives.
