Islamic Treasury Sukuk Auction Sees Strong Demand from 8 Banks

The Ministry of Finance, as the issuing entity, and in cooperation with the Central Bank of the UAE, as the issuing and paying agent, announced the results of the auction of Islamic Treasury Sukuk “T-Sukuk” denominated in dirhams, as part of the Islamic Treasury Sukuk issuance program for the third quarter of 2024, as published on the Ministry’s website.

The Islamic Treasury Sukuk Programme auction witnessed strong demand from the eight primary distributor banks for the 3- and 5-year tranches, with bids worth AED 6.76 billion received and the subscription volume exceeded by 6.1 times.

The success of the auction is reflected in the attractive market-driven pricing achieved at a yield to maturity (YTM) of 4.77% for the 3-year tranche and 4.43% for the 5-year tranche, which was 1 and 3 basis points lower than comparable U.S. Treasury securities at the time of issuance.

It is worth noting that local currency Islamic treasury bonds build a yield curve denominated in UAE dirhams, 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.