UAE Bonds & Sukuk Yields Explained — What They Pay in 2026 (AED Reference)
- Jun 2
- 8 min read
Updated: Aug 16
If you have ever wondered where the UAE government borrows money — and what rate it pays — you are looking at the same benchmarks that anchor every floating-rate mortgage, every bank fixed deposit, and every corporate sukuk in this country. The CBUAE has held its Base Rate at 3.65% since 17 June 2026 (reaffirmed 29 July 2026), and the most recent Treasury auction (July 2026) priced the AED T-Bond maturing January 2031 at 4.48% YTM and the companion T-Sukuk at 4.49%. The bigger news this cycle: the UAE's first-ever Sovereign Retail T-Sukuk — open to individuals from AED 1,000 — listed on Nasdaq Dubai on 2 July 2026, paying a 4.30% profit rate. Below is the full yield snapshot, updated as of 16 August 2026.
This page covers AED-denominated government Treasury Bonds, Treasury Sukuk and the new Retail T-Sukuk, plus key USD-denominated sukuk from UAE banks — so you can see where the country's credit is priced across maturities and structures. All figures are indicative and sourced from official auction releases and verified news reports. Rates change with every auction; always confirm with the issuer or your broker before acting. This is not financial advice.
UAE Bond & Sukuk Yield Snapshot — Rates as of 16 August 2026 (indicative, verify)
Rates are indicative and change with each auction or secondary-market move. Verify current yields directly with Emirates NBD, Nasdaq Dubai, or your broker before investing. AED T-Bond/T-Sukuk/Retail T-Sukuk data from UAE Ministry of Finance auction results; USD sukuk data from Zawya primary-market reports.
Instrument | Issuer | Maturity / Tenor | Yield / Profit Rate | Last Auction / Date | Currency | Notes |
Treasury Bond (T-Bond) | UAE MoF / CBUAE | ~5 years (Jan 2031) | 4.48% YTM | Jul 2026 | AED | Conventional. AED-denominated; Nasdaq Dubai listed. Spread: ~+4 bps over comparable UST. 4.4x oversubscribed. |
Islamic Treasury Sukuk (T-Sukuk) | UAE MoF / CBUAE | ~14 months (Oct 2027) | 4.49% profit rate | Jul 2026 | AED | Islamic (Ijara). Part of same AED1.1bn July 2026 auction (AED4.83bn bid, 4.4x oversubscribed). Spread: ~+24 bps over UST. |
Sovereign Retail T-Sukuk | UAE MoF | 2 years | 4.30% profit rate | 2 Jul 2026 (listing) | AED | Islamic. UAE's first sukuk open directly to individuals — min AED1,000, profit paid every 6 months. ~9x oversubscribed (AED445mn bid vs AED50mn target, upsized to AED100mn). |
Senior Unsecured Sukuk | First Abu Dhabi Bank (FAB) | 5 years | 4.859% profit rate | May 2026 | USD | Islamic. $700mn benchmark. Spread: +85 bps over UST (tightened from +115 bps guidance). Not retail-eligible. |
AT1 Perpetual Sukuk (NC6) | Dubai Islamic Bank (DIB) | Perpetual / Non-Call 6yr | 6.250% final profit rate | 9 Jun 2026 | USD | Islamic AT1 bank capital. $1bn; tightened from 6.625% IPT as the book grew past $2.3bn (~2.3x). Listed Nasdaq Dubai + Euronext Dublin. AT1 = higher risk than senior debt; ranks below depositors. |
Sources: UAE Ministry of Finance — July 2026 auction results | WAM — Treasury Sukuk & Bonds auctions, Jul 2026 | Gulf News — UAE's first Retail T-Sukuk, 4.30% profit rate | Zawya — DIB AT1 sukuk, June 2026
How to Read This Table
YTM (Yield to Maturity) — The annualised return if you buy now and hold to maturity — the key comparison metric across all instruments. Not the same as the coupon/profit rate if the bond trades above or below face value.
Profit rate vs interest rate — T-Sukuk and Retail T-Sukuk quote a 'profit rate' (Islamic); T-Bonds quote a 'yield' (conventional). Both represent the annualised return to the holder — the structural difference is Shariah-compliance, not the economic return.
Spread over UST — UAE AED bonds are priced at a spread above comparable US Treasury yields. Tighter spreads (4–24 bps on the July 2026 auction) signal strong investor confidence in UAE sovereign credit.
AT1 / perpetual sukuk — AT1 (Additional Tier 1) sukuk are bank capital instruments — higher coupon but subordinated to all other creditors, can be written down if the bank's capital falls below a trigger. Not comparable to sovereign bonds for risk.
Retail vs institutional access — The Retail T-Sukuk (AED 1,000 minimum, via Emirates NBD/Emirates Islamic/ADIB/Ajman Bank/Mashreq) is a separate, individual-investor track from the regular T-Bond/T-Sukuk auctions, which are geared to banks and institutional investors.
What Is Driving UAE Yields Right Now (August 2026)
1. The Fed peg — rates holding steady through summer
The AED/USD peg at 3.6725 means the CBUAE mechanically mirrors Fed rate decisions. The US Federal Reserve's Interest Rate on Reserve Balances (IORB) has stayed unchanged through the summer, and the CBUAE reaffirmed its Base Rate at 3.65% on 29 July 2026 — the same level held since 17 June. Source: CBUAE — Base Rate maintained at 3.65%, 29 Jul 2026.
2. A new retail channel — individuals can now buy sovereign debt directly
The Ministry of Finance's inaugural Sovereign Retail T-Sukuk subscribed 24-30 June 2026 and listed on Nasdaq Dubai on 2 July 2026 — the first sukuk UAE residents could buy directly from AED 1,000, rather than through the institutional auction process. Demand reached AED445mn against a AED50mn target (9x oversubscribed), prompting the Ministry to upsize the issuance to AED100mn. Source: Gulf Business — UAE opens first-ever retail T-Sukuk subscription.
3. Elevated issuance, comfortably absorbed
The July 2026 T-Bond/T-Sukuk auction issued AED1.1bn against AED4.83bn in bids — a 4.4x oversubscription, in line with every UAE sovereign auction in 2026. Nasdaq Dubai recorded 33 new fixed income listings worth USD13.8bn in H1 2026 alone, taking total fixed income listed on the exchange to USD141bn (USD98.6bn sukuk, USD42.4bn bonds) — a market that keeps growing without yields blowing out. Source: Zawya — Nasdaq Dubai H1 2026 fixed income listings.
4. Geopolitical risk premium — largely absorbed since spring
Spreads over US Treasuries on the July auction narrowed further to 4-24 bps (from 6-23 bps in the April/May auctions) — near the tightest levels of the year, suggesting the risk premium that briefly widened earlier in 2026 has continued to compress as demand has stayed strong through the summer.
AED vs USD — Two Yield Curves, One Peg
The UAE runs parallel yield curves. The AED curve — T-Bonds, T-Sukuk and now the Retail T-Sukuk from the Ministry of Finance — is the domestic benchmark, priced close to the CBUAE Base Rate with a small spread over comparable US Treasuries (4-24 bps on the July 2026 auction). The USD curve — bank and corporate sukuk such as FAB's 4.859% 5-year and DIB's 6.250% AT1 — sits higher, reflecting currency/credit spread and, for AT1 paper, subordination risk. For AED-based investors, the AED T-Bond/T-Sukuk/Retail T-Sukuk rates are the directly relevant benchmark.
What Changes the Numbers
Fed decisions — The single biggest lever. A Fed rate cut → CBUAE cuts → shorter-tenor UAE yields fall. A Fed hike → UAE yields rise. The Fed's IORB has been on hold through summer 2026.
US Treasury yields (longer end) — 10-year and 30-year UST moves pull the longer UAE AED and USD yields — spreads adjust, but the absolute level tracks USTs closely.
UAE sovereign credit perception — Events that raise or lower perceived UAE risk (regional conflict, oil price moves, regulatory changes) widen or tighten the spread over UST. The July 2026 auction's 4-24 bps spreads reflect near-maximum confidence.
Auction demand / oversubscription — High oversubscription (4.4x institutional, ~9x on the Retail T-Sukuk) allows the MoF to tighten yields — heavy demand keeps spreads tight. A low-bid auction would widen them.
Islamic vs conventional structure — T-Sukuk and T-Bonds of similar maturities have traded within 1-15 bps of each other in the UAE — the structural premium for Shariah compliance is small at the sovereign level.
FAQ — UAE Bonds & Sukuk Yields
Q: Can I as a UAE resident buy T-Bonds or T-Sukuk directly?
Yes. UAE residents can subscribe to Treasury Bonds and Treasury Sukuk through Emirates NBD (the lead retail bank), plus Emirates Islamic, ADIB, Ajman Bank and Mashreq for retail sukuk, with a minimum of AED 1,000. The first Sovereign Retail T-Sukuk listed on Nasdaq Dubai on 2 July 2026 and was almost 9x oversubscribed — check emiratesnbd.com or your bank's app for the next subscription window.
Q: How does the AED–USD peg affect UAE bond yields?
The UAE dirham is pegged to the US dollar at AED 3.6725. This means the Central Bank (CBUAE) closely follows the US Federal Reserve on interest-rate decisions. The Fed's IORB has been on hold through mid-2026, and the CBUAE has held its Base Rate at 3.65% since 17 June 2026 (reaffirmed 29 July 2026) — so short-tenor UAE yields have stayed broadly steady over the summer.
Q: What is the difference between a sukuk and a bond?
A conventional bond is a loan: you lend money and earn interest. A sukuk is a Shariah-compliant certificate of ownership in an underlying asset (e.g. Ijara = lease). You earn a 'profit rate' rather than 'interest' — the economic return is similar, but the structure must avoid riba (interest) and prohibited activities. In practice, the July 2026 UAE T-Sukuk and T-Bond of similar maturity priced within 1 bp of each other (4.49% vs 4.48%).
Q: What does 'YTM' mean, and why does it differ from the coupon?
YTM (Yield to Maturity) is the total annualised return if you buy the bond/sukuk today and hold it to maturity, accounting for the purchase price, coupon payments, and face value repaid at maturity. If you buy above face value, YTM is below the coupon; if below face value, YTM exceeds the coupon. Auction results quote YTM — this is the number to compare across instruments.
Q: What is the new Retail T-Sukuk, and is it different from the regular T-Sukuk?
The Sovereign Retail T-Sukuk is a separate, smaller-denomination sukuk launched in June-July 2026 specifically so individual UAE residents can invest directly in government debt for as little as AED 1,000 (versus the institutional T-Sukuk/T-Bond auctions, where minimums and process are geared to banks and large investors). Its 2-year tenor pays a 4.30% profit rate every six months. Subscription windows open periodically via approved banks — this is not a standing, always-open product, so check with your bank for the current window before assuming it is available today.
Q: Are these suitable for everyday savers looking to park AED?
Government-backed T-Bonds, T-Sukuk and the new Retail T-Sukuk are a legitimate option for conservative savers seeking AED returns broadly in line with the best bank savings promotions — the July 2026 5-year T-Bond yielded 4.48% and the Retail T-Sukuk pays 4.30%. The trade-off: your money is locked up for the tenor (secondary-market exit is possible for the institutional instruments via Nasdaq Dubai, less so for retail-sized holdings). Always verify current subscription availability and confirm yields directly with your bank before committing funds. This is not financial advice.
Sources & Methodology
All yield figures are from official UAE Ministry of Finance auction press releases or verified reporting by WAM, Zawya, Gulf News and Gulf Business. CBUAE Base Rate from the CBUAE press release of 29 July 2026. Corporate/bank sukuk data (FAB, DIB) from Zawya primary-market reports. No real-time secondary-market terminal data was available; live DFM/Nasdaq Dubai secondary sukuk prices require market-data access. Key sources: mof.gov.ae | centralbank.ae | zawya.com | wam.ae | gulfnews.com. Figures are indicative and refreshed weekly; always confirm with the issuer, Emirates NBD (retail sukuk subscriptions), Nasdaq Dubai, or a licensed broker before acting.
This page is for informational purposes only and does not constitute financial, investment, or tax advice. Rates and yields change frequently — verify all figures directly with the issuer or your licensed financial adviser before making any investment decision.
Pair It With — More UAE Money Guides
If you found this useful, these reference pages sit alongside it: UAE Savings & Fixed Deposit Rates — Weekly Comparison (see the current best AED savings rates) and UAE Personal Loan Rates Compared (how EIBOR and the CBUAE Base Rate feed through to consumer borrowing). Both pages are refreshed weekly.
Not sponsored. All rates, yields, and figures are sourced from public auction results and verified news reports, independently researched with no commercial arrangement with any bank, developer, or issuer mentioned.
— Angel Tyagi, Creator of Angel In Dubai | Updated 16 August 2026
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