7-year tranche of T-Sukuk lunched

The Ministry of Finance (MoF), in its capacity as issuer and in collaboration with the Central Bank of the UAE (CBUAE) as issuing and payment agent, announced the launch of the first-ever 7-year tranche of UAE dirham-denominated Islamic Treasury Sukuk (T-Sukuk) valued at Dhs550 million. This represents the longest tenor issued under the programme to date, reflecting the strategic direction to extend and deepen the UAE dirham yield curve.

The new tranche attracted strong demand amounting to approximately Dhs3.1 billion, nearly six times the issuance size, showing investors’ confidence in the resilience of the national economy and the strength of the Islamic finance sector.

This came as part of the MoF’s announcement of the successful completion of the February auction of UAE dirham-denominated Islamic Treasury Sukuk, with a total issuance of Dhs1.1 billion. The issuance forms part of the Islamic Treasury Sukuk Programme for 2026, as published on the Ministry’s official website.

The auction witnessed strong participation from the eight primary dealers across both tranches maturing in May 2030 and February 2033. Total bids reached Dhs5.88 billion, representing an oversubscription ratio of 5.3 times, with the 7-year tranche oversubscribed circa 6 times. This robust demand reflects investors’ confidence in the UAE’s creditworthiness and Islamic finance framework.

The auction results achieved competitive, market-driven pricing with a YTM of 3.53 percent for the May 2030 tranche and 3.779 percent for the February 2033 tranche priced below par to comparable US Treasuries at the time of issuance. In addition, these Sukuk are listed under the UAE Treasury Islamic Sukuk Programme with Nasdaq Dubai, enhancing investor access in the secondary market.

The Islamic T-Sukuk programme plays a vital role in supporting the development of the UAE’s dirham-denominated yield curve, offering secure investment instruments for a wide range of investors.

WAM