UAE: Third Islamic Treasury Sukuk auction achieves exceptional results
The third auction of the UAE T-sukuks programme witnessed a strong demand through the eight primary dealers, with bids received worth AED6 billion, and an oversubscription by 5.5 times.
The strong demand was on both, the two- and five-year tranches. The success is reflected in the attractive market driven prices, which was achieved by a spread of zero to two basis points over US Treasuries with similar maturities.
The third auction witnessed the issuance of the first dirham-denominated Islamic Treasury Sukuks with a five-year maturity, which achieved very strong results and was oversubscribed by 6.6 times. The auction also followed the practice of re-opening the two-year T-sukuks which helps in building up the size of individual sukuk issues over time and improve liquidity in the secondary market.
The T-sukuks programme will contribute to building the UAE dirham-denominated yield curve, providing safe investment alternatives for investors, strengthening the local debt capital market, developing the investment environment, as well as supporting sustainable economic growth.