Saudi wealth fund’s $4bln bond 4x oversubscribed

The fund stated that bond proceeds will be used for general corporate purposes

Saudi Arabia’s Public Investment Fund (PIF) has successfully priced a $4 billion bond issuance, divided into two tranches.

The offering saw strong demand from global investors, generating an order book of approximately $16 billion—four times the initial offering size, according to a statement.

Under its Euro Medium-Term Note Program, PIF issued $2.4 billion in five-year debt instruments and an additional $1.6 billion in securities with a maturity of nine-and-a-half years. The proceeds from this issuance will be used for general corporate purposes.

This milestone follows PIF’s recent closure of its inaugural Murabaha credit facility, securing $7 billion in funding. It marks another step in the fund’s broader strategy to raise capital in the coming years.

“Strong demand from international institutional investors underscores PIF’s diverse investor base, robust capital-raising strategy, and solid credit profile,” said Ahmed Alrobayan, head of public markets, Global Capital Finance at PIF.

“These factors ensure uninterrupted access to global capital markets and are vital to PIF’s role in supporting Saudi Arabia’s economic transformation,” he added.

PIF emphasized that the oversubscription reflects the effectiveness of its capital-raising strategy and reinforces its strong financial position.

In November, credit rating agency Moody’s upgraded PIF’s rating from A1 to Aa3 with a stable outlook, highlighting the fund’s financial strength. The Aa3 rating signifies high credit quality, low credit risk, and a strong ability to meet short-term debt obligations.

Moody’s noted that the upgrade reflects the strong credit linkage between PIF and the Saudi government.

In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes from a global syndicate of 23 financial institutions across the US, Europe, the Middle East, and Asia. The facility, initially set for three years, is extendable for up to two additional years.

A revolving loan allows funds to be drawn, repaid, and redrawn within the agreed lending period.

Currently managing $925 billion in assets, PIF aims to expand its portfolio to $2 trillion by 2030, according to a recent forecast by monitoring organization Global SWF.