The Ministry of Finance (MoF), as the issuer, and the Central Bank of the UAE (CBUAE), as the issuance and payment agent, announced the results of the auction for Islamic Treasury Sukuk (T-Sukuk) denominated in UAE dirhams for Dhs1.1 billion. This issuance is part of the Islamic Treasury Sukuk program for the third quarter of 2024, as announced on the Ministry’s website.
The auction showed high demand from the eight principal bank dealers for the tranche graduating in May 2027 and the new five-year tranche maturing in September 2029. Bids totalled Dhs5.07 billion, which exceeded the subscription volume by 4.6 times. The auction’s success is reflected in the competitive market prices achieved, with a yield to maturity (YTM) of 3.67% for the tranche maturing in May 2027 and 3.65% for the tranche maturing in September 2029, with a spread of 13 to 15 basis points over US Treasury bonds of comparable maturities at the time of issuance.
It is worth noting that the local currency-denominated Islamic Treasury Sukuk helps to build a UAE dirham-denominated yield curve, providing investors with secure investment options. This helps to increase the competitiveness of the local debt capital market, improve the investment environment, and encourage long-term economic growth.
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