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Saudi Arabia's Public Investment Fund (PIF) has revealed initial pricing indications for its three-tranche US-dollar-denominated bond. The first tranche, maturing in 2029, proposes a spread of 150 basis points over US Treasuries for its five-year bonds. The second tranche, maturing in 2034, suggests a price guidance of 175 bps over US Treasuries for its 10-year bonds, while the third option, maturing in 2054, indicates a spread of 235 bps over the same benchmark for its 30-year option. Citi, Goldman Sachs International, and J.P. Morgan are joint global coordinators for the bond offerings.
- The anticipated Fitch rating for the issuance is A+, aligning with the agency's Government-Related Entities Rating Criteria, categorizing PIF as an entity credit-linked to the Saudi government. This alignment is determined by Fitch's evaluation of the strength of linkage with Saudi Arabia and the government's incentive to provide support to PIF. In October 2023, PIF successfully concluded its Shariah-compliant bonds totaling $3.5 billion, attracting oversubscription more than seven times, showcasing investor confidence. The issuance comprised two tranches, with the first maturing in 2028 and the second in 2033.
Why it matters
As a global investor, PIF manages a top-tier portfolio emphasizing sustainability, contributing to innovation, job creation, and the growth of Saudi Arabia's economy as one of the world's largest sovereign wealth funds.
