SAUDI ARABIA

PIF secures largest ever term loan globally

$17bn raised from broad-based financing syndicate

December 01, 2022

RIYADH — Saudi Arabia's Public Investment Fund (PIF) announced on Wednesday that it secured a $17 billion, seven-year senior unsecured term loan.

This represents the largest self-arranged term loan ever raised for general corporate purposes. It reflects significant demand from an international syndicate and a continuation of PIF’s strategy to diversify its sources of funding, helping to drive impactful investment in Saudi Arabia and internationally. PIF’s existing $11 billion, five-year loan, arranged in 2018, will be repaid early.

The transaction was supported by a broad-based, global syndicate of 25 financial institutions from Europe, the US, the Middle East and Asia. The transaction was more than twice oversubscribed. PIF’s original $11-billion loan facility in 2018 saw 15 financial institutions participate.

The new loan forms part of PIF’s medium-term capital raising strategy and its 2022 Annual Capital Raising Plan — the plan includes several funding tools that would ensure the PIF continuous and sustainable access to diverse funding sources, both public and private.

Commenting on the loan arrangement, Fahad AlSaif, head of Global Capital Finance Division at the PIF, said: “This new facility is a strong endorsement of PIF’s medium-term capital raising strategy.

“It is a significant achievement for the PIF, raising a record-sized term facility in the longest tenor ever for a loan of its size that is subscribed to by an unprecedentedly diversified number of lenders. The PIF will continue to explore a variety of debt funding sources as it delivers on its strategic objectives.”

The PIF received strong international credit ratings from both Moody’s and Fitch for the first time in February 2022, underlining the creditworthiness of the Fund and the quality of its investment portfolio. The PIF has a well-established long-term financing strategy that is built around four sources of funding, ensuring its ability to finance activity over the long term. These sources include capital injections by the government, government asset transfers to the PIF, retained earnings from investments, and loans and debt instruments. — SG


December 01, 2022
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