PIF enlists global banks for second debt market issue

Saudi Arabia’s Public Investment Fund (PIF) has hired banks for its upcoming Shariah-compliant dollar bond, marking its second venture into the bond market this year.

The sovereign fund, which manages over $700 billion in assets, has mandated Goldman Sachs, HSBC and Standard Chartered as joint global coordinators, Reuters reported, citing a PIF document. Investor meetings started on Monday.

The unsecured sukuk will have a seven-year tenure. The total amount to be raised was not disclosed.

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Last month, PIF received orders for more than $20 billion for its dollar-denominated triple-tranche bond sale, capital markets publication IFR reported.

The sovereign fund raised $5 billion through selling a triple-tranche conventional bond and $3.5 billion from a sukuk deal in October.

PIF plans to ramp up its capital deployment to $70 billion a year after 2025, from the current $40-$50 billion, PIF governor Yasir Al-Rumayyan said last week in Miami.

Saudi Arabia requires roughly SAR86 billion ($23 billion) in financing this year in order to help balance the kingdom’s books, finance minister Mohammed Al Jadaan said in January.

The 2024 budget statement, approved in December, estimated that the deficit for 2023 will be $22 billion, rather than the surplus of $4 billion that was being predicted last year.

The plan will be used to finance the deficit “in addition to seizing available opportunities according to market conditions to implement additional financing activities to pay debt maturing in the coming years”.