- Saudi Arabia's Public Investment Fund (PIF) is poised to increase its borrowing activity following two successful bond sales this year, totaling $7 billion, as indicated by insights from Morgan Stanley. Analysts anticipate another bond issuance in the latter half of 2024, projecting a potential total issuance of $10 billion to $11 billion. This strategy aligns with the fund's evolving financial landscape, marked by decreasing treasury assets and escalating spending requirements. In its recent Islamic bond offering, PIF raised $2 billion, following a $5 billion sale of high-grade bonds in January.
- The substantial funds raised reflect PIF's pivotal role in Saudi Arabia's economic diversification agenda under Crown Prince Mohammed bin Salman, fueling investments across various sectors such as electric vehicles, semiconductors, tourism, and sports. Goldman Sachs Group Inc., HSBC Holdings Plc, and Standard Chartered Plc were appointed as global coordinators for the bond sale, indicating robust investor confidence in PIF's strategic initiatives.
Why it matters
The seven-year dollar sukuk sale, priced at 85 basis points over the Treasuries, garnered significant interest, with order books surpassing $16 billion. Notably, the initial pricing was set lower, at 115 basis points above the Treasuries.
