Clifford Chance advises the UAE Ministry of Finance on its landmark sovereign retail treasury sukuk programme and initial issuances

The firm advised the Federal Government of the United Arab Emirates, represented by the Ministry of Finance, on the expansion of the UAE Treasury Sukuk Programme to accommodate retail offerings with IPO-style subscription and allocation arrangements, and on the successful completion of the first two UAE sovereign retail treasury sukuk issuances.

Clifford Chance has advised the Federal Government of the United Arab Emirates, represented by the Ministry of Finance, on adapting its UAE dirham-denominated Treasury Sukuk Programme to enable treasury sukuk to be offered to the public in the UAE, and on the first two issuances under the expanded programme. The transactions enabled individual investors to participate directly in UAE sovereign sukuk offerings for the first time.

The retail offerings use an IPO-style subscription model, under which investors subscribe through Dubai Financial Market channels, including its digital platform and brokerage applications, and through the digital platforms of approved receiving banks.

The retail offering framework was developed in collaboration with Dubai Financial Market and Nasdaq Dubai, and required new operational arrangements and infrastructure to enable platform-based investor participation and allocation. The resulting structure combines elements of IPO execution with traditional sukuk issuance methodologies and provides a repeatable platform for successive retail issuances.

The programme is designed to enhance financial inclusion in the UAE, broaden access to sovereign Shariah-compliant investment instruments, support the continued development of the UAE dirham yield curve, and strengthen the domestic capital markets and Islamic finance ecosystem.

The inaugural issuance in June attracted subscriptions of AED 445 million, nearly nine times the original target issuance size of AED 50 million. In response to that demand, the Ministry of Finance increased the issuance size to AED 100 million. The second issuance in September continued that strong momentum, attracting subscriptions exceeding AED 285 million, more than five times the issuance size of AED 50 million.

Stuart Ure, Head of Middle East Capital Markets, commented: “This programme breaks new ground in the UAE capital markets by enabling individual investors to subscribe directly to sovereign sukuk through the same digital channels they use for equity IPOs. The integration of retail subscription mechanics into a government debt programme required bespoke documentation, a new operational framework and unique collaboration with all stakeholders”.

Clifford Chance’s team comprised Stuart Ure (Partner and Head of Middle East Capital Markets, Dubai), Pearl Mahaga (Senior Associate, Dubai), and Ali Gorji (Trainee, Dubai), advising the Ministry of Finance and Bruce Kahl (Partner, London) and Andrew Whelan (Senior Associate, London), advising i2 Capital as delegate for the retail treasury sukuk.