Saudi Arabia’s PIF three-part bond sale receives over $20 billion in orders
Saudi Arabia’s sovereign wealth fund has received orders for over $20 billion for its dollar-denominated triple-tranche bond sale announced on Monday, capital markets publication IFR reported.
The Public Investment Fund (PIF), which had around $718 billion in assets under management as of Sept. 30, joins a wave of emerging market issuers that have tapped the debt market this year.
The PIF gave an initial guidance for the issuance of around 150 basis points over US Treasuries for its 5-year bonds, 175 bps over US Treasuries for its 10-year bonds and 235 bps over the same benchmark for its 30-year option, a bank document showed.
Citi, Goldman Sachs International and J.P. Morgan are joint global coordinators for the bond offering, according to the documents.
The final size of the debt sale is expected to be announced later on Monday.
PIF is the chosen vehicle of Saudi Crown Prince Mohammed bin Salman to drive the country’s ambitious plan to wean itself off oil as it spends billions on diversifying its economy.
The fund has raised tens of billions to fund a mammoth investment program to create new industries and jobs by expanding both at home and abroad with a slew of investments and joint ventures as well as tapping the debt market.
Saudi Arabia, the world’s top oil exporter, earlier this month launched a $12 billion, three-part bond issue, and PIF last October completed the issuance of Islamic bonds for $3.5 billion. Both issues generated strong demand.
Debt issuance from emerging markets has made a roaring start in 2024 with bond sales in the first half of January topping $30 billion.
Debt sales have been skewed towards higher-rated sovereigns, with Mexico launching its biggest ever sale at $7.5 billion in early January and Poland, Hungary and Indonesia all active in the market.
Apart from Saudi Arabia, at least five other countries are each expected to issue at least $10 billion, namely Indonesia, Poland, Turkey, Israel and Mexico, with the latter potentially reaching $18 billion.
Analysts at Morgan Stanley estimate that developing countries will issue nearly $165 billion this year – a roughly 20 percent or $30 billion increase on 2023.
