Saudi Arabia’s Public Investment Fund is heading to the international bond market for the second time this year.
It started Saudi Public Investment Fund PIF recently took practical steps to expand its international financing channels, as it began receiving bids to purchase US dollar-denominated international sukuk with a 7-year term.
The step aims toSaudi Public Investment Fund…to strengthen the long-term financing base and provide alternative financing sources to support its diverse investment projects, both domestically and abroad.
This is the second time the fund has turned to the international bond market this year.
Offering details and initial pricing
A banking document issued by one of the banks overseeing the offering, seen by Reuters, revealed that the initial indicative price for the sukuk was set at a spread of approximately 145 basis points over US Treasury yields, indicating the issuance’s attractiveness to international investors seeking high returns in a turbulent economic environment.
Despite global economic turmoil, exacerbated by US policy decisions to impose new tariffs, particularly by US President Donald Trump, informed sources confirm that Gulf issuers are proceeding with their plans to launch new offerings in global financial markets.
And it was the last time he resorted to Public Investment Fund…to international debt markets last January, when it raised $4 billion in a two-tranche offering.
Saudi Public Investment Fund Financing Strategy
Through this new issue, the fund sends a clear message to investors that its financial strategies are flexible and adaptable to global economic shifts.
The Fund also affirms its continued diversification of funding sources to achieve its objectives within the objectives of “Saudi Vision 2030“which focuses on building a more sustainable and diversified economy.
The fund relies on a diversified financing strategy that includes loans, debt instruments, capital increases through the state, transferring government-owned assets to the fund, and investment returns.
This strategy enables the Fund to achieve its development and investment objectives efficiently and effectively.
The Public Investment Fund has received strong credit ratings from international rating agencies. Moody’s has assigned it an A1 rating with a “positive” outlook, while Fitch has assigned it an A+ rating with a “stable” outlook.
The global position of the Saudi Public Investment Fund
The Saudi Public Investment Fund, with assets estimated at approximately $925 billion, is among the largest sovereign wealth funds in the world.
The fund’s assets under management witnessed significant growth, reaching SAR 2.81 trillion ($749.2 billion) in 2023.
By July 2024, assets had risen to $925 billion, making the fund the sixth largest sovereign wealth fund in the world.
The fund has a diversified investment portfolio comprising more than 200 companies in the Middle East and North Africa region, contributing to strengthening the Kingdom’s position on the global economic stage.
The Fund’s role in achieving “Saudi Vision 2030”
The Saudi Public Investment Fund (PIF) is one of the Kingdom of Saudi Arabia’s most prominent tools for achieving its ambitious Vision 2030, playing a pivotal role in diversifying the economy and promoting local and international investment.
Through its diverse strategies and ambitious initiatives, the Fund seeks to achieve sustainable development and increase financial returns for the Kingdom.
It has played a pivotal investment role in recent years, supporting strategic projects within the Kingdom, while expanding its investments in international sectors including technology, energy, and infrastructure.
Through its diverse investments and ambitious strategies, the Saudi Public Investment Fund continues to play a pivotal role in achieving Saudi Vision 2030 and strengthening Saudi Arabia’s position as a global economic power.
