UAE: Islamic treasury bonds attract Dhs7.20bn in bids at auction

The Ministry of Finance (MoF) in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and paying agent, announced the successful results of its latest Islamic treasury sukuk (T-Sukuk) auction.

The auction, which is part of the Islamic T-sukuk issuance programme for Q4 2024, saw Dhs1.1bn worth of sukuk issued, denominated in UAE dirhams.

The auction attracted significant interest from eight primary dealers, resulting in a total of Dhs7.2bn in bids, oversubscribing the offering by 6.5 times.

Strong demand for treasury sukuk

This strong demand is seen as a positive reflection of market confidence, with both tranches — maturing in May 2027 and September 2029 — priced competitively.

The yield to maturity (YTM) for the May 2027 tranche was set at 4.10 per cent, while the September 2029 tranche offered a YTM of 4.12 priced, with spreads of 10 and 12 basis points, respectively, above US Treasuries with similar maturities.

The Islamic T-Sukuk issuance programme plays a pivotal role in enhancing the UAE’s financial markets by contributing to the development of a UAE dirham-denominated yield curve, providing secure investment opportunities, and strengthening the local debt capital market.