The UAE Ministry of Finance (MoF) has successfully completed its June 2025 Islamic Treasury Sukuk (T-Sukuk) auction, raising AED 1.1 billion ($300 million). This issuance forms a key part of the Ministry’s broader 2025 sukuk programme.
Held in partnership with the Central Bank of the UAE (CBUAE), the auction witnessed robust participation from eight primary dealers. This strong demand reflects sustained investor trust in the UAE’s financial framework and its efforts to develop a Shariah-compliant debt market.
Strong Demand and Competitive Pricing
The auction was oversubscribed by 5.6 times, clearly demonstrating the rising interest in Islamic sovereign instruments. The auction delivered market-driven yields, with:
- 3.88% Yield to Maturity (YTM) for the May 2027 tranche
- 3.83% YTM for the August 2028 tranche
Both yields had a tight 2-basis-point spread over equivalent US Treasuries, signalling strong pricing efficiency and investor confidence.
Advancing Market Depth and Fiscal Goals
The Ministry highlighted several strategic goals tied to the sukuk issuance. Specifically, the programme aims to:
- Develop a reliable dirham-denominated yield curve
- Offer investors a secure and transparent investment platform
- Provide new liquidity tools for regional and local banks
Moreover, the MoF reiterated that these efforts support long-term fiscal sustainability, while also reinforcing the UAE’s leadership in Islamic finance.
In addition, the Ministry confirmed that the T-Sukuk initiative enhances the country’s financial ecosystem by aligning investment offerings with Islamic principles, and by improving capital market access for a broader investor base.
