Saudi Arabia's PIF Maps Out Trillion-Dollar Overhaul Financing Strategy

Saudi Arabia's PIF Maps Out Trillion-Dollar Overhaul Financing Strategy

By Staff Writer, 19 March 2024

To propel its trillion-dollar economic overhaul, Saudi Arabia's Public Investment Fund (PIF) is exploring avenues to accelerate debt sales or secure bank loans, as reported by Bloomberg.

Sources familiar with the matter revealed that the sovereign wealth fund is contemplating equity offerings in its portfolio companies as part of its financing strategy.

The urgency stems from the dwindling cash reserves of the $940 billion wealth fund, which stood at $15 billion as of September, marking its lowest level since 2020.

Cognizant of the potential strain on the local banking system, PIF is cautious about exhausting liquidity.

To alleviate pressure on local banks and facilitate financing for domestic real estate ventures, PIF is encouraging its subsidiaries to explore dollar borrowings where viable.

Furthermore, PIF intends to establish a yield curve for its subsidiaries by frequently issuing bonds, providing a benchmark for pricing their own debt sales.

The fund plans to tap debt markets regularly for several billion dollars across various durations. This year alone, PIF has already issued two separate bonds, raising $7 billion.

The wealth fund has bolstered IPO activity in the Kingdom by offering stakes in oil drillers such as ADES Holding and Arabian Drilling.

It is also gearing up medical procurement firm Nupco and Saudi Global Ports Co. for share sales later this year, signaling a dynamic approach to investment and economic transformation.

Source: Zawya

Related Report

Riyadh Startup Ecosystem

The Evolution of Saudi Arabia Startup Ecosystem 2010-2022

The first comprehensive overview of Saudi's startup ecosystem, its history, and its future.

Subscribe To Our Newsletter

Stay up to date with the latest news, special reports, videos, infobytes, and features on the region's most notable entrepreneurial ecosystems