UAE T-Sukuk Auction Exceeds Expectations, Attracting Great Demand from Banks and Investors

The Islamic Treasury Sukuk “T-Sukuk” auction in dirhams, held by the Ministry of Finance and the Central Bank of UAE, has been met with great demand from eight primary distributor banks. The 3- and 5-year tranches attracted bids worth a total of AED 6.76 billion, which exceeded expectations by 6.1 times.

The success of the auction was evident in the competitive pricing achieved, with yields to maturity (YTM) at 4.77% for the 3-year tranche and 4.43% for the 5-year tranche. These rates were lower than comparable U.S. Treasury securities at the time of issuance by one to three basis points, indicating strong market demand for local treasury bonds denominated in UAE dirhams.

The issuance program is part of the Ministry’s efforts to build a yield curve denominated in UAE dirhams and provide safe investment opportunities for domestic and international investors. By enhancing the competitiveness of the local debt capital market, improving the investment environment, and supporting economic growth sustainability, this program is expected to have a positive impact on overall economic development in UAE.

Overall, this successful auction highlights the growing demand for Islamic treasury bonds as an attractive investment opportunity in UAE’s local debt capital market.