The UAE’s latest T-sukuk auction witnessed surging demand with bids totaling AED7.83 billion ($2.13 billion) and an oversubscription by 7.1 times. The auction saw strong demand from eight primary dealers for both the 3-year and 5-year tranches of the Islamic T-Sukuk.
The Ministry of Finance, in collaboration with the Central Bank of the UAE, announced the results of the auction today. The auction falls under the Islamic T-Sukuk issuance program for Q1 2024.
The auction achieved a spread of 4 basis points (bps) over the U.S. Treasuries with similar maturities.
Read: Saudi Arabia closes March issuance of sukuk program at $1.17 billion
Islamic T-Sukuk issuance program
T-Sukuk are dirham-denominated, Islamic Sharia-compliant financial instruments issued by the federal government. Their primary objectives are to support the establishment of a dirham-denominated Sukuk capital market in the UAE. Moreover, they seek to tap the growing global Sukuk market.
In an effort to foster the UAE’s local debt capital market, the country launched the Islamic T-Sukuk issuance program. The program aims to build the UAE’s dirham-denominated yield curve and provide safe investment alternatives for investors. Moreover, it seeks to strengthen the country’s local debt capital market, develop its investment environment, and support sustainable economic growth.
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