Saudi Arabia’s sovereign wealth fund secured $2 billion through the issuance of Sukuk, its second bond issuance the debt market this year, Bloomberg reported on Wednesday.
The Public Investment Fund (PIF) reportedly issued a seven-year dollar-denominated bonds at a spread of 85 basis points over the Treasury benchmark, as indicated by a source familiar with the matter.
Order books exceeded $16 billion, inclusive of interest from joint lead managers. Initially, the offering was proposed with a spread in the range of 115 basis points over the Treasuries.
Moreover, the wealth fund overseeing assets of over $700 billion, is continuing its series of bond offerings this year. In January, it raised $5 billion through the issuance of high-grade bonds.
Notably, governments from emerging markets are currently issuing new dollar-denominated bonds at the most rapid rate seen in over twenty years, with borrowers spanning from investment-grade Chile to high-yield Benin.
Sovereign bond issuance has totaled approximately $58 billion so far this year, marking the highest volume to date in two decades.
The PIF constitutes a crucial element of Prince Mohammed bin Salman’s strategy to diversify the Saudi economy away from oil dependency. It aims to allocate hundreds of billions of dollars in the forthcoming years towards a wide array of sectors, including electric vehicles, semiconductors, tourism resorts, and sports ventures.
Furthermore, the wealth fund appointed Goldman Sachs Group Inc., HSBC Holdings Plc, and Standard Chartered Plc as global coordinators for the sale.
