The Ministry of Finance, in collaboration with the Central Bank of the UAE as the issuing and paying agent, has announced the successful auction of Islamic Treasury bonds denominated in UAE dirhams for April 2026, with a total issuance of AED 1.1 billion. This issuance is part of the annual Islamic Treasury bonds program for 2026, as stated on the ministry’s official website.
The auction saw strong participation from eight primary dealers across two issuance segments maturing in October 2027, along with an additional issuance for the 7-year term maturing in February 2033. The total subscription requests amounted to AED 5.20 billion, indicating a coverage ratio of 4.7 times, reflecting the continuous investor confidence in the UAE’s creditworthiness and its robust economy.
Moreover, the additional offering of the 7-year Islamic Treasury bonds attracted considerable demand, achieving a coverage ratio of 5 times, and was priced only 10 basis points above the yields of comparable US Treasury bonds. This follows the success of the initial issuance of this term in February 2026, which achieved a coverage ratio of 6 times and was priced below the yields of similar US Treasury bonds. This exceptional interest in the 7-year term demonstrates the ministry’s capability to develop a comprehensive sovereign yield curve in UAE dirhams.
The auction results showcased competitive pricing reflecting market mechanisms, with a yield to maturity (YTM) of 3.92% for the October 2027 segment and 4.13% for the February 2033 segment. The shorter-term segment was priced 23 basis points, while the 7-year segment was priced with a narrow spread of 10 basis points above comparable US Treasury yields at the time of issuance. Additionally, these bonds have been included in the UAE’s Islamic Treasury bonds program on Nasdaq Dubai, enhancing their accessibility to investors in the secondary market.
The Islamic Treasury bonds program plays a vital role in supporting the development of the yield curve denominated in UAE dirhams, providing secure investment instruments for a broad range of investors. It also contributes to enhancing the local debt market, developing the investment ecosystem, and supporting the nation’s long-term goals for economic sustainability and growth.