Saudi Arabia’s Public Investment Fund to Issue Sterling-Denominated Bonds
In a bold move, Saudi Arabia’s Public Investment Fund has announced plans to issue sterling-denominated bonds, a first for Saudi entities since 2020. Sources reveal that the sovereign wealth fund has enlisted the expertise of Barclays, BNP Paribas, HSBC, and JPMorgan as joint global coordinators to kickstart the process.
Two Tranches, Two Maturity Dates
The fund intends to release two tranches of sterling-denominated bonds, with maturity dates set at five and 15 years. With a staggering $1 trillion in assets under management, the PIF is gearing up to ramp up its capital deployment to $70 billion annually post-2025, a significant increase from the current $40 billion to $50 billion range.
Expansion and Diversification
Having recently raised $5 billion through a conventional bond sale and $3.5 billion from a sukuk deal, the PIF is now eyeing the US dollar-denominated sukuk market. The fund is in talks with potential investors, with an initial indicative price set at a premium of approximately 115 basis points above US Treasury bonds.
Green Bonds and Sustainable Efforts
In a bid to lead sustainable initiatives in the Gulf Cooperation Council region, the PIF raised $8.5 billion in green bond proceeds in 2023, as reported by Moody’s Investors Service. This move underscores the fund’s commitment to environmental and social responsibility while fostering economic growth in the region.