Abu Dhabi's initial bond sale for 2026, comprising two tranches of US dollar-denominated bonds, garnered more than $11 billion in orders. The indicative prices for the 5-year and 10-year bonds were set at 50 and 55 basis points respectively over US Treasuries. This issuance marks Abu Dhabi's first in 2026 and highlights significant investor interest, with the benchmark size typically being $500 million.
Separately, the UAE also saw strong demand for its dirham-denominated Treasury bonds (T-Bonds) and Islamic Sukuk (T-Sukuk). In January 2026, auctions for T-Sukuk and T-Bonds totaling AED 1.1 billion ($299.5 million) attracted AED 5.15 billion ($1.4 billion) in bids, an oversubscription of 4.7 times. These instruments offered competitive yields, with the T-Sukuk tranche at 3.66% and the T-Bond tranche at 3.90%, representing tight spreads of up to 9 basis points above comparable US Treasuries. The total outstanding under these programs reached AED 28 billion ($7.62 billion), with maturities ranging from 2 to 5 years.
Further auctions in March 2026 issued AED 1.1 billion ($299.5 million) in T-Bonds, with bids totaling AED 4.85 billion ($1.32 billion), resulting in an oversubscription of 4.4 times. The yields on these T-Bonds were 3.73% for the September 2027 maturity and 3.85% for the January 2031 maturity, with spreads up to 16 basis points above comparable US Treasuries. These successful auctions underscore strong investor confidence in the UAE's financial sector and national economy, despite regional uncertainties. The bond sales are crucial for supporting the UAE's economic diversification and funding ambitious projects in AI chip and biomedical industries.
Fitch Ratings estimates that Gulf debt markets will surpass $1.2 trillion in outstanding bonds by the end of 2026, with GCC states like Saudi Arabia, Kuwait, and the UAE expected to be major issuers in the debt capital markets. The UAE's commitment to developing its dirham-denominated yield curve through these T-Bond and T-Sukuk programs also aims to offer secure investment instruments and enhance liquidity in the local debt capital market.
