https://arab.news/4y2kf
RIYADH: 抖阴短视频鈥檚 Public Investment Fund has commenced the sale of US dollar-denominated sukuk with priority payment for a seven-year term, as reported by Reuters.
According to a banking document viewed by the agency, the initial indicative price for the bond sale has been set at a premium of around 115 basis points above US Treasury bonds.
The Kingdom鈥檚 sovereign wealth fund, managing assets exceeding $700 billion, has appointed Goldman Sachs, HSBC, and Standard Chartered to arrange meetings with potential investors.
PIF, along with the government of 抖阴短视频, last month joined a wave of emerging market issuers seeking to take advantage of rising demand for debt before central banks are expected to lower interest rates later this year.
A sukuk is a financial offering that complies with Islamic religious rules regarding interest. PIF accounted for about a quarter of the $124 billion spent by sovereign wealth funds worldwide last year, according to a report in January from industry specialist Global SWF.
The fund plans to ramp up its deployment of capital to $70 billion a year after 2025, from $40 billion to $50 billion currently, PIF Gov. Yasir Al-Rumayyan said last week in Miami.
It 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.
Last month鈥檚 $5 billion bond issuance successfully concluded pricing, drawing demand that propelled order books to reach $27 billion, marking an oversubscription of more than five times, as stated in an official announcement.
It comprised three tranches 鈥� one valued at $1.75 billion with a five-year coupon maturing in 2029, another for the same amount with a 10-year coupon, and the final valued at $1.5 billion over a 30-year period.
Fahad Al-Saif, head of PIF鈥檚 global capital finance division, said: 鈥淐ontinued strong demand from international institutional investors is testament to the ongoing success of PIF鈥檚 medium-term capital raising strategy.鈥�
Loans and debt instruments represent one of PIF鈥檚 four sources of funding. The wealth fund is rated A1 by Moody鈥檚 with a positive outlook and A+ by Fitch with a stable outlook.