The PIF is also looking to raise a benchmark 2032 green bond at a targeted spread of around 135 basis points above US Treasuries
Saudi Arabia’s sovereign wealth fund is preparing to tap bond investors for a fourth time this year as it looks to finance its huge domestic investment plans.
The Public Investment Fund (PIF) is marketing a three-year sukuk of a benchmark size, which typically means at least US$500 million, according to people familiar with the matter. The initial target for the spread is around 110 basis points above US Treasuries.
The PIF, as the fund is known, is also looking to raise a benchmark 2032 green bond at a targeted spread of around 135 basis points above US Treasuries, the people said, asking not to be identified as the information is private.
Goldman Sachs Group, HSBC Holdings and JPMorgan Chase are among the bookrunners.
The wealth fund’s latest fundraising marks a busy period of borrowing as it juggles a commitment to ramp up domestic investments with how to finance those plans. It has already raised US$7 billion from two dollar bond sales this year, plus an additional £650 million (S$1.11 billion) from a sterling denominated issue in June. Subsequently, the PIF refinanced a US$15 billion loan.
Earlier this year, the fund received an additional US$164 billion stake in oil giant Saudi Aramco to help boost its finances.
The PIF, chaired by Crown Prince Mohammed Salman, is a key part of his plans to reshape the Saudi economy. The fund was likely to accelerate debt sales and seek new bank loans as part of plans to raise cash, Bloomberg reported in March.
The wealth fund’s 2024 financing needs stand at US$22 billion, Morgan Stanley strategist Pascal Bode wrote in a research report on Tuesday (Sep 3). That’s less than half of what has been raised through bond sales this year. “Debt is likely to feature even more prominently going forward absent higher FDI or oil prices,” he said. BLOOMBERG
