Banking & Finance

Saudi wealth fund PIF secures ‘record’ $17bn loan

November 30, 2022, 2:02 PM

Saudi Crown Prince Mohammed Bin Salman, chairman of PIF

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fun, announced on Wednesday that it has secured a new $17 billion, seven-year senior unsecured term loan.

According to PIF, this represents the largest self-arranged term loan ever raised for general corporate purposes.

It added that it is supported by “significant demand” from an international syndicate and reflects a continuation of its strategy to diversify its sources of funding, helping to drive investments in Saudi Arabia and internationally.

“This new facility is a strong endorsement of PIF’s medium-term capital raising strategy,” Fahad Al-Saif, head of global capital finance division at PIF, said.

“It is a significant achievement for PIF, raising a record-sized term facility in the longest tenure ever for a loan of its size that is subscribed to by an unprecedentedly diversified number of lenders.

“PIF will continue to explore a variety of debt funding sources as it delivers on its strategic objectives.”

PIF’s existing $11 billion, five-year loan, arranged in 2018 with 15 financial institutions participating, will be repaid early, it said in a statement.

The transaction was supported by a syndicate of 25 financial institutions from Europe, the US, the Middle East and Asia and was more than twice oversubscribed.

The new loan forms part of PIF’s medium-term capital raising strategy and its 2022 Annual Capital Raising Plan.

Last month, PIF reported profit of $22.81 billion in 2021, a year-on-year increase of 13 percent. Revenue rose 27 percent year-on-year to $60.6 billion.

The value of the fund’s fixed assets jumped 43 percent year-on-year to nearly $78 billion.

Since 2017, the fund has established 66 companies and created, directly and indirectly, over 500,000 jobs as at the end of 2021.

In February, PIF received strong international credit ratings from both Moody’s and Fitch for the first time, underlining its creditworthiness and the quality of its investment portfolio.