High investment confidence…auction coverage "Finance" Sukuk and bonds increased by 4.7 times in the first issuances of the year
ABU DHABI, 31 JANUARY / WAM / The Ministry of Finance, in its capacity as the issuing authority, and in cooperation with the Central Bank of the United Arab Emirates, in its capacity as the issuing and payment agent, announced the success of the auctions of Islamic Treasury Sukuk “T-Sukuk” and Government Treasury Bonds “T-Bonds” denominated in UAE dirhams, for the month of January 2026, with a total issuance value of 1.1 billion dirhams.
These issues represent the first offerings within the sukuk and bond programs for the year 2026, as published on the Ministry’s official website, and the new issuance of treasury bonds represents the first tranche to be offered within the program since March 2023, which supports the development of the yield curve and enhances the depth of the secondary market.
The sukuk and bond auctions witnessed strong demand from banks dealing with the tranche of sukuks due in October 2027 and the new tranche of bonds due in January 2031, with the total value of bids submitted reaching 5.15 billion UAE dirhams, equivalent to about 4.7 times the size of the issue. This high demand reflects investors’ confidence in the strength of the financial sector in the country and the strength of the national economy.
The success of the issuance is highlighted by the competitive prices based on market mechanisms, which were achieved at a yield-to-maturity (YTM) rate of 3.66% for the Sukuk tranche and 3.90% for the bond tranche, with a slight difference of 9 basis points over the yields of US Treasury bonds for similar maturities for the two tranches at the time of issuance. The two tranches of Sukuk and bonds will also be listed on Nasdaq Dubai, which enhances investors’ ease of access to them in the secondary market.
The issuances reflect the continued growth of the two programmes, with the total outstanding balance reaching 28 billion dirhams, distributed over maturities ranging from two to five years.
It is worth noting that the local currency sukuk and bond programs work to build the return curve denominated in the UAE dirham, and provide safe investment alternatives for investors, which contributes to enhancing the competitiveness of the local debt capital market, improving the investment environment, and supporting the sustainability of economic growth.
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