Clifford Chance

Clifford Chance advises UAE Ministry of Finance on UAE dirham-denominated Islamic Treasury Sukuk Programme and ground-breaking auction

Leading international law firm Clifford Chance has advised the Federal Government of the United Arab Emirates, represented by the Ministry of Finance as the issuer, on the issuance of UAE dirham-denominated Islamic Treasury Sukuk (T-Sukuk), with a benchmark auction size of AED 1.1 billion.

The establishment of the T-Sukuk Programme follows the establishment of the Federal Government's UAE dirham-denominated Treasury Bonds Programme in April 2022, on which Clifford Chance also advised the Federal Government.

The auction of the AED 1.1 billion T-Sukuk witnessed incredibly strong demand through its eight primary bank dealers, with bids received worth AED 8.3 billion, and an oversubscription of 7.6 times. The strong demand was across two tranches, with a final allocation of AED 550 million for the two-year tranche and AED 550 million for the three-year tranche.

The T-Sukuk will contribute to strengthening the Islamic economy and building a pioneering investment infrastructure to boost the Islamic economy as one of the key pillars of the UAE economy. The issuance also helps further build the UAE Dirham-denominated yield curve, thereby strengthening the local financial market and developing the investment environment.

The structuring of the T-Sukuk has been approved by the Higher Shari'ah Authority at the Central Bank of the UAE, which cooperates with the relevant authorities to standardise and unify the practices of Islamic financial institutions to be compatible with internationally recognised Shari'a standards and best practices.

Clifford Chance's team comprised partner and Head of Middle East Capital Markets, Stuart Ure (Dubai), Qudeer Latif (Global Head of Islamic Finance), Shauaib Mirza (Consultant, Dubai), Cheuk yin Cheung (Head of Structured Products, Dubai), Pearl Mahaga (Senior Associate, Dubai), Ursula Gil (Regional Head of Knowledge and Information, Middle East) and Saby Mahmud (Trainee, Dubai).

Stuart Ure commented: "It has been a privilege to be trusted once more to work alongside the Federal Government on the historic establishment of the Islamic Treasury Sukuk programme. The establishment of the programme represents another milestone towards the development of the Islamic capital markets in the UAE and is a testament to the tremendous efforts of the Ministry of Finance, the Central Bank of the UAE, the Primary Dealers and the key institutional stakeholders in this project".

Eight banks acted as Primary Dealers; Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, Mashreqbank and Standard Chartered Bank.

Consistently ranked Band 1 in legal directories, Clifford Chance was awarded 15 awards at the Bonds, Loans & Sukuk Awards 2023 and was named Banking Legal Adviser of the Year at the Bonds, Loans & Sukuk Middle East Awards 2022, and Middle East International Law Firm of the Year at the Chambers Middle East Awards 2021.