UAE Secures AED1.1B in Latest T-Sukuk Auction Driven by Robust Demand

Post by : Bianca Suleiman

The UAE's Ministry of Finance (MoF), in conjunction with the Central Bank, has effectively completed the auction for April 2026 Islamic Treasury Sukuk (T-Sukuk), successfully raising AED1.1 billion.

This issuance is part of a broader strategy for the government's T-Sukuk program in 2026, aiming to enhance the financial landscape of the nation while providing secure investment avenues.

The auction attracted active participation from eight primary dealers across two different tranches, featuring a segment maturing in October 2027 alongside a 7-year Sukuk set to mature in February 2033.

Total bid submissions reached AED5.20 billion, resulting in a significant oversubscription ratio of 4.7. Such robust demand underscores the high level of investor confidence in the UAE’s financial health and creditworthiness.

The 7-year Sukuk tranche performed particularly well, achieving a coverage ratio of 5 times. It was priced at only 10 basis points over US Treasury yields, reflecting competitive pricing. This comes on the heels of its inaugural issuance in February 2026, which was oversubscribed by a factor of six and priced competitively relative to US Treasury benchmarks.

These results are indicative of the government’s ongoing progress in establishing a dependable dirham-denominated yield curve. The Yield to Maturity (YTM) was recorded at 3.92% for the October 2027 tranche and 4.13% for the February 2033 tranche, with spreads of 23 and 10 basis points respectively over US Treasuries.

Moreover, the Sukuk listings on Nasdaq Dubai enhance accessibility for investors within the secondary market.

The UAE's Islamic T-Sukuk initiative continues to foster the advancement of the domestic debt market, offering secure investment channels while bolstering the country’s long-term economic aspirations.