UAE’s Islamic Treasury Sukuk Auction Draws Overwhelming Demand, Raising AED 1.1 Billion
The UAE’s Ministry of Finance (MoF), in partnership with the Central Bank of the UAE (CBUAE), has successfully conducted its latest Islamic Treasury Sukuk (T-Sukuk) auction, raising AED 1.1 billion. This issuance is part of the Ministry’s ongoing Islamic T-Sukuk issuance programme for the first quarter of 2025.
The auction, which attracted significant interest from the market, saw bids worth a total of AED 6.91 billion, reflecting a remarkable oversubscription rate of 6.3 times. Eight primary dealers participated in the auction, with strong demand across both tranches maturing in May 2027 and September 2029.
The successful auction results are indicative of the robust market appetite for UAE Dirham-denominated assets. The tranche maturing in May 2027 offered a Yield to Maturity (YTM) of 4.32%, while the September 2029 tranche provided a YTM of 4.43%. These yields represent spreads of 7 and 10 basis points over comparable US Treasuries, further demonstrating the attractive market-driven pricing.
The proceeds from the Islamic T-Sukuk issuance are part of the UAE’s strategy to build a robust Dirham-denominated yield curve, offering safe investment alternatives and contributing to the growth of the local debt capital market. By doing so, the UAE aims to enhance the investment environment, promote economic sustainability, and strengthen the overall financial ecosystem.
This latest successful auction underscores the UAE’s commitment to fostering a resilient and diversified economy, with the Islamic T-Sukuk playing a key role in supporting sustainable growth and development in the region.
