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Saudi wealth fund PIF set to issue sterling-denominated bonds

Saudi wealth fund PIF
Official data from Saudi Arabia shows that the private sector non-oil growth was stable in May, with the Purchasing Managers’ Index slightly decreasing to 56.4 from 57 in April

The Public Investment Fund (PIF) of Saudi Arabia has begun the process of issuing bonds denominated in sterling.

The Sovereign Wealth Fund (SWF) has directed Barclays, BNP Paribas, HSBC, and JPMorgan to serve as joint global coordinators in order to schedule investor meetings beginning on June 3.

The Arab News states that, contingent on market conditions, a sale will occur after investor calls.

According to reports, this would be the second offering by Saudi entities in sterling and the first since 2020. Two tranches of bonds denominated in sterling with five- and fifteen-year maturities are intended to be issued by the fund.

With about USD 1 trillion in assets under management, the PIF intends to boost capital deployment from USD 40 billion to USD 50 billion annually to USD 70 billion after 2025.

The fund raised USD 3.05 billion from a sukuk deal in October 2023 and USD 5 billion by selling a triple-tranche conventional bond in January.

In addition, the PIF started selling sukuk denominated in US dollars with priority payment for seven years.

The bond sale’s initial indicative price was set at a premium of about 115 basis points over US Treasury bonds, the reports revealed.

Goldman Sachs, HSBC, and Standard Chartered have been designated by the Kingdom’s Sovereign Wealth Fund to set up meetings with prospective investors.

Moody’s Investors Service noted that the sovereign fund has raised USD 8.5 billion through green bond proceeds in 2023 and is leading sustainable initiatives in the Gulf Cooperation Council region.

Meanwhile, official data from Saudi Arabia shows that the private sector non-oil growth was stable in May, with the Purchasing Managers’ Index slightly decreasing to 56.4 from 57 in April.

According to the Riyad Bank Saudi Arabia PMI report by S&P Global, business activity in the country continued to grow at a significant rate in May 2024, maintaining a trend of strong output growth in the non-oil economy.

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