The UAE Ministry of Finance, in collaboration with the Central Bank of the UAE, successfully raised AED1.1 billion (approximately $299.5 million) through its April 2026 auction of dirham-denominated Islamic Treasury Sukuk. The issuance included two tranches, one maturing in October 2027 and another representing a second offering of the 7-year sukuk due in February 2033, with participation from eight primary dealers.
The auction witnessed strong investor appetite, with total bids reaching AED5.20 billion, resulting in an oversubscription rate of 4.7 times. This robust demand reflects continued investor confidence in the UAE’s credit strength and economic resilience.
The 7-year sukuk tranche attracted particularly strong interest, achieving a coverage ratio of five times and pricing at just 10 basis points above comparable U.S. Treasury yields. This follows the success of its inaugural issuance in February 2026, which was six times oversubscribed and priced below U.S. Treasury benchmarks, highlighting sustained demand for longer-term instruments.
In terms of returns, the yield to maturity was recorded at 3.92% for the October 2027 tranche and 4.13% for the February 2033 tranche. These yields represented spreads of 23 basis points and 10 basis points, respectively, above comparable U.S. Treasury securities at the time of issuance, indicating competitive, market-driven pricing.
The sukuk are listed on Nasdaq Dubai under the UAE Treasury Islamic Sukuk Programmed, enhancing accessibility and liquidity in the secondary market. The programmed continues to play a key role in developing the UAE’s dirham-denominated yield curve, while offering secure, Shariah-compliant investment options.
Overall, the initiative strengthens the domestic debt capital market, supports a broader investment environment, and contributes to the UAE’s long-term economic sustainability and growth objectives.