The Ministry of Finance, acting as the issuer in collaboration with the Central Bank of the United Arab Emirates as the agent for issuance and payment, has announced the launch of its inaugural tranche of Islamic treasury bonds (T-Sukuk) with a seven-year maturity valued at 550 million dirhams. This marks the longest tenure issued under the program to date and reflects the strategic aim to extend and deepen the UAE dirham yield curve. The new tranche attracted strong demand, totaling approximately 3.1 billion dirhams, nearly six times the issuance size, which underlines investors’ confidence in the robustness of the national economy and the strength of the Islamic finance sector.
This announcement is part of the Ministry of Finance’s report regarding the successful auction of UAE dirham-denominated Islamic treasury bonds for February, which totaled 1.1 billion dirhams as part of the Islamic Treasury Bonds Program for 2026, as published on the ministry’s official website.
The auction experienced robust interest from eight primary banks allocated across two tranches maturing in May 2030 and February 2033, with overall bids reaching 5.88 billion dirhams, or roughly 5.3 times the size of the issuance (nearly six times the new seven-year tranche), further reflecting investors’ faith in the solidity of the Islamic finance sector and the national economy.
A competitive pricing outcome based on market mechanisms was observed in the auction, with a yield to maturity (YTM) of 3.53% for the May 2030 tranche and 3.779% for the February 2033 tranche, both priced below comparable U.S. Treasury yields at the time of issuance. These bonds are listed as part of the UAE Islamic Treasury Bonds Program on Nasdaq Dubai, enhancing investors’ access in the secondary market.
It is essential to note that local currency Islamic treasury bonds contribute to the establishment of a yield curve denominated in dirhams, providing safe investment alternatives for investors, thereby enhancing the competitiveness of the local debt capital market, improving the investment environment, and supporting sustainable economic growth.