The UAE has introduced its first-ever seven-year Islamic Treasury Sukuk, marking the longest maturity issued under the programme so far. The AED550 million tranche attracted nearly six times its value in bids, underscoring strong investor appetite and confidence in the country’s Islamic finance framework.
Longest tenor issued under the programme
The Ministry of Finance, acting as issuer and working in collaboration with the Central Bank of the UAE as issuing and payment agent, announced the launch of the first seven-year tranche of UAE dirham-denominated Islamic Treasury Sukuk, commonly referred to as T-Sukuk.The new tranche was valued at AED550 million and represents the longest tenor issued to date under the Islamic Treasury Sukuk programme. The move reflects a strategic effort to extend and deepen the UAE dirham yield curve, providing longer-term benchmarks within the domestic debt market.
Strong investor demand and oversubscription
The seven-year tranche drew demand of approximately AED3.1 billion, nearly six times the issuance size. This level of subscription indicates sustained investor confidence in the resilience of the national economy and the strength of the Islamic finance sector.The launch formed part of the successful completion of the February auction of UAE dirham-denominated Islamic Treasury Sukuk. The total issuance for the February auction reached AED1.1 billion and falls under the Islamic Treasury Sukuk Programme for 2026, details of which have been published on the Ministry’s official website.Across both tranches offered in the auction, total bids amounted to AED5.88 billion, representing an overall oversubscription ratio of 5.3 times. The seven-year tranche alone was oversubscribed by around six times.Participation came from eight primary dealers, covering two maturities:
- A tranche maturing in May 2030
- A tranche maturing in February 2033
Pricing and market positioning
The auction achieved competitive, market-driven pricing.The yield to maturity stood at:
- 3.53 percent for the May 2030 tranche
- 3.779 percent for the February 2033 tranche
The February 2033 tranche was priced below par relative to comparable US Treasuries at the time of issuance, highlighting favourable pricing conditions.In addition, the Sukuk are listed on Nasdaq Dubai under the UAE Treasury Islamic Sukuk Programme. The listing enhances investor access and supports liquidity in the secondary market.
Supporting the Dirham yield curve and capital markets
The Islamic T-Sukuk programme plays a central role in developing the UAE’s dirham-denominated yield curve. By introducing longer tenors, the programme provides secure investment instruments suited to a broad base of investors.Beyond immediate fundraising objectives, the initiative strengthens the local debt capital market, contributes to the wider investment landscape, and supports the UAE’s long-term economic sustainability and growth ambitions.With the introduction of the first seven-year tranche and strong auction performance, the programme signals continued depth and maturity within the country’s Islamic finance ecosystem.
