The Public Investment Fund sold five, 10 and 30-year senior unsecured notes in US dollars. — Bloomberg
RIYADH: Saudi Arabia’s sovereign wealth fund raised US$5bil of high-grade bonds on Monday, the latest borrower to benefit from investors’ demand for emerging market debt.
The Public Investment Fund (PIF) sold five, 10 and 30-year senior unsecured notes in US dollars, according to a person familiar with the matter.
Combined order books were above US$27bil, excluding joint lead managers’ interests, said the person, who asked not to be identified because they’re not authorised to speak about it.
The PIF, which manages over US$700bil in assets, is following a spree of bond sales last week, including from Mexico and Hungary.
Brazil on Monday tapped the debt markets for the second time in less than three months, selling US$4.5bil of dollar notes.
Meanwhile, Saudi Arabia itself borrowed US$12bil earlier in January as investors sought to grab debt at high yields before global central banks were expected to lower interest rates later this year.
It’s the wealth fund’s first debt sale this year, following a sukuk offering in October and green bonds in February.
The final spread narrowed by 35 basis points versus the initial price target for the shortest tranche and 30 basis points for the 10-year and 30-year tenors.
The pricing levels imply a small new issue concession of between four and six basis points.
The deal “offers a small premium considering the ongoing geopolitical tensions in the broader Middle East region,” said Apostolos Bantis, managing director of fixed income advisory at Union Bancaire Privee Ubp SA, who expected the final pricing to tighten by circa 25 basis points and demand to remain healthy enough.
The PIF is a key part of Crown Prince Mohammed bin Salman’s efforts to diversify the Saudi economy from oil. It plans to invest hundreds of billions of dollars in the coming years in everything from electric vehicles to semiconductors, tourism resorts and sports.
The fund, chaired by the crown prince, who is the kingdom’s de facto ruler, was the world’s most active sovereign investor in 2023, according to research consultancy Global SWF, deploying US$32bil on deals.
The PIF mandated JPMorgan Chase and Co, Citigroup Inc and Goldman Sachs Group Inc as joint global coordinators for the bond sale. — Bloomberg
