Another achievement realized by Saudi Arabia’s Public Investment Fund (PIF) is registering the first sterling bond sale with a value of £650 million ($829. 80 million) to utilize its existing Euro Medium-Term Note program.
The demand for the issuance itself appears to have been remarkable; the order book was more than six times subscribed implying that investors placed their trust in PIF’s creditworthiness as well as it strategy. It comprises two tranches: a £300 million bond with a 5-year fixed coupon and another bond of £350 million with a 15-year fixed interest rate.
This fits PIF’s ongoing efforts to diversify funding sources for the portfolio consistently. Bonds and loans are the most important instruments that PIF uses together with the reinvested earnings of its investments, additional capital made by the government, and the government assets which are entrusted to PIF.
Still, the success of the offering demonstrates PIF’s attractive credit ratings, with an A1 stable outlook according to Moody’s and an A+ stable outlook, according to Fitch. These ratings are approved because PIF has strong economic indicators and is one of the financial pillars for the Saudi Arabia’s economy development and transformation.
This monumental bond issuance indicates that PIF is willing, and able, to tap the international debt capital markets and continue to establish itself as one of the most influential SWFs in the global economy.
