UAE Debuts First 7-Year Islamic Treasury Sukuk, Records Nearly Sixfold Oversubscription

UAE Expands Islamic Debt Programme with 7-Year Sukuk

The Ministry of Finance, working alongside the Central Bank of the UAE, has launched the UAE’s first 7-year Islamic Treasury Sukuk (T-Sukuk). The AED550 million ($149.7 million) issuance marks the longest tenor introduced under the national Islamic Treasury Sukuk Programme.

The move represents a strategic step to extend the UAE dirham-denominated yield curve while reinforcing the country’s leadership in Islamic finance.

Strong Oversubscription Reflects Investor Confidence

The 7-year tranche generated bids totaling approximately $844 million, nearly six times the size of the offering. The broader February auction raised around $299.5 million across two tranches, with total subscriptions reaching nearly $1.6 billion — reflecting an overall oversubscription ratio of more than five times.

This robust participation signals sustained investor confidence in the UAE’s economic fundamentals, fiscal stability, and Shariah-compliant investment framework.

Competitive Yields Across Two Maturities

The auction included two maturity profiles: May 2030 and February 2033. The 7-year February 2033 tranche attracted particularly strong demand.

Yield to maturity was set at 3.53% for the May 2030 tranche and 3.779% for the February 2033 tranche. Both tranches were competitively priced relative to comparable US Treasury benchmarks at the time of issuance, enhancing their appeal to institutional investors.

Eight primary dealers participated in the issuance, strengthening liquidity within the domestic debt capital market.

Nasdaq Dubai Listing Enhances Market Accessibility

The Sukuk are listed on Nasdaq Dubai under the UAE Treasury Islamic Sukuk Programme. The listing supports transparent trading and efficient secondary market activity, broadening investor access to UAE sovereign Islamic securities.

This step aligns with the UAE’s broader objective of deepening local capital markets and positioning itself as a global Islamic finance hub.

Strengthening the UAE’s Dirham Yield Curve

The Islamic Treasury Sukuk Programme plays a central role in building a reliable dirham-denominated yield curve. By introducing longer tenors, the government enhances pricing benchmarks for corporate issuers and strengthens the domestic fixed-income ecosystem.

The programme provides secure, Shariah-compliant investment avenues for banks, asset managers, and regional and international investors seeking stable returns.

Outlook: Continued Growth in Islamic Capital Markets

The successful launch of the 7-year Sukuk underscores growing demand for UAE sovereign Islamic instruments. With competitive pricing, strong institutional participation, and structured issuance planning, the UAE continues to advance its long-term economic diversification and sustainable finance strategy.