The United Arab Emirates launches the first 7-year Islamic sukuk and attracts bids worth 3.1 billion dirhams/representative image
The UAE has issued its first seven-year Islamic treasury sukuk, representing the longest maturity period issued under the program to date. The tranche, amounting to 550 million dirhams, attracted about six times its value in bids, which confirms the strong appetite of investors and their confidence in the framework of Islamic finance in the country.
The longest term issued under the programme
The Ministry of Finance, as the issuer and working in cooperation with the Central Bank of the United Arab Emirates as issuing and payment agent, announced the launch of the first seven-year tranche of Islamic Treasury Sukuk denominated in UAE dirhams, commonly referred to as T-Sukuk.The value of the new tranche is 550 million dirhams, and is the longest maturity period issued so far under the Islamic Treasury Sukuk programme. This move reflects a strategic effort to widen and deepen the UAE Dirham yield curve, providing long-term benchmarks within the local debt market.
Strong investor demand and increased subscription
The seven-year tranche attracted demand worth approximately AED 3.1 billion, nearly six times the issue size. This level of subscription indicates investors’ continued confidence in the resilience of the national economy and the strength of the Islamic finance sector.This launch comes within the framework of the successful completion of the February auction of Islamic treasury bonds denominated in the UAE dirham. The total issuances from the February auction amounted to 1.1 billion dirhams, and falls within the Islamic Treasury Sukuk Program for the year 2026, the details of which were published on the Ministry’s official website.
Through the two tranches offered in the auction, the total bids reached 5.88 billion dirhams, representing a total oversubscription rate of 5.3 times. The seven-year tranche alone was oversubscribed by about six times.Participation came from eight major dealers, covering two maturity periods:
- The tranche matures in May 2030
- The tranche matures in February 2033
Pricing and market positioning
The auction achieved competitive market-based pricing.The return to maturity was:
- 3.53 percent for the May 2030 tranche
- 3.779 percent for the February 2033 tranche
The February 2033 tranche was priced below par compared to comparable US Treasury securities at the time of issuance, highlighting favorable pricing conditions.In addition, the Sukuks are listed on the Nasdaq Dubai Stock Exchange as part of the Islamic Sukuk Program of the UAE Treasury. The listing enhances investor access and supports liquidity in the secondary market.
Supporting the dirham yield curve and capital markets
The Islamic Treasury Sukuk program plays a central role in developing the UAE dirham-denominated yield curve. By offering longer periods, the program provides safe investment tools suitable for a broad base of investors.Beyond its direct fundraising objectives, the initiative works to strengthen the local capital market, contribute to the broader investment landscape, and support the UAE’s long-term economic sustainability and growth ambitions.With the first tranche being offered for seven years and the strong performance of the auctions, the program indicates continued depth and maturity within the country’s Islamic finance ecosystem.
