Arab News, Tue, Jun 04, 2024 | Dhu al-Qadah 27, 1445
Saudi wealth fund set to issue sterling-denominated bonds
Saudi Arabia:
Saudi Arabia’s Public Investment Fund has initiated plans to issue
sterling-denominated bonds, according to Arab News sources.
The sovereign wealth fund has mandated Barclays,
BNP Paribas, HSBC, and JPMorgan to act as joint global coordinators to arrange
meetings with investors starting June 3.
According to the sources, investor calls will be
followed by a sale subject to market conditions. This would be the first
sterling-denominated offering by Saudi entities since 2020 and reportedly only
the second ever.
The fund aims to issue two tranches of
sterling-denominated bonds with five-year and 15-year maturity dates.
With approximately $1 trillion in assets under
management, the PIF plans to increase its capital deployment to $70 billion a
year after 2025, up from the current $40 billion to $50 billion.
The fund raised $5 billion through the sale of a
triple-tranche conventional bond in January and $3.5 billion from a sukuk deal
in October 2023.
Furthermore, the PIF also commenced the sale of US
dollar-denominated sukuk with priority payment for a seven-year term.
The initial indicative price for the bond sale has
been reportedly set at a premium of around 115 basis points above US Treasury
bonds.
The Kingdom’s sovereign wealth fund has appointed
Goldman Sachs, HSBC, and Standard Chartered to arrange meetings with potential
investors.
The sovereign fund is also spearheading
sustainable efforts in the Gulf Cooperation Council region, as it raised $8.5
billion in green bond proceeds in 2023, according to Moody’s Investors Service.