Post by : Bianca
Haleem
In a successful collaboration with the Central Bank of the UAE, the Ministry of Finance (MoF) has completed its auction of Islamic Treasury Sukuk (T-Sukuk) for April 2026, raising AED1.1 billion.
This issuance is integral to the government's 2026 T-Sukuk program, aimed at solidifying the financial market while offering stable investment options.
The auction attracted extensive interest from eight primary dealers, covering two tranches: one maturing in October 2027 and another 7-year Sukuk due in February 2033.
With total bids reaching AED5.20 billion, the auction was oversubscribed by 4.7 times, reflecting robust investor confidence in the UAE’s economic stability.
The 7-year Sukuk tranche performed particularly well, achieving a coverage ratio of 5 times, priced just 10 basis points above US Treasury yields, indicating competitive pricing. This comes on the heels of a successful January 2026 issuance that saw a 6x oversubscription, priced favorably against comparable US benchmarks.
The results signify the government’s commitment to establishing a dependable dirham-denominated yield curve. The Yield to Maturity (YTM) has been set at 3.92% for the October 2027 tranche and 4.13% for the February 2033 tranche, both competitively priced with tight spreads over US Treasuries.
These Sukuk are listed on Nasdaq Dubai, enhancing accessibility for investors within the secondary market.
The ongoing Islamic T-Sukuk program in the UAE plays a vital role in nurturing the local debt market and advancing the country’s long-term economic objectives.
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