The UAE’s two tranche Islamic Treasury Sukuk (T-Sukuk) auction of 1.1 billion dirham ($299.5 million) was oversubscribed more than six times and received bids worth 6.91 billion dirhams ($1.88 billion) for the three-year and five-year tranches, the finance ministry said on Wednesday.
The tranche maturing in May 2027 carried a yield of 4.32% while the tranche maturing on September 2029 carried 4.43%, representing a spread of 7 and10 basis points (bps) above US Treasuries with similar maturities at the time of the auction.
The issuance was part of the government’s Sharia-compliant treasury bonds programme for the first quarter of 2025.
Islamic T-Sukuk are asset-backed Islamic Sharia-compliant financial instruments whose profit and payment at maturity mainly rely on the performance of the issuer’s assets.
The UAE government began issuing dirham T-bonds in 2022, and T-sukuk in 2023 to diversify its funding resources.
In 2024, the volume of sukuk issued by UAE-based issuers reached $14.4 billion, according to S&P Global Ratings.
(Writing by Brinda Darasha; editing by Seban Scaria)
brinda.darasha@lseg.com
