Riyad September 6 2022: Saudi Arabia’s sovereign wealth fund is close to refinancing an $11 billion loan and significantly increasing the size of the borrowing, according to people familiar with the matter told Bloomberg.
The Public Investment Fund will use the bulk of the potentially bigger loan to refinance debt that’s due to mature next year, the people said, asking not to be identified because the matter is private. Final terms have yet to be agreed, the people said.
A representative for the PIF, as the fund is known, declined to comment.
The $620 billion wealth fund is borrowing even as soaring crude prices are set to give the kingdom its first budget surplus in almost a decade. The government has said it will keep that windfall in a current account and decide on allocating it between state-owned funds like the PIF and reserves held by the central bank only after the end of the year.
The PIF in 2018 borrowed $11 billion in its first-ever loan. Some of the biggest global lenders including Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan Chase & Co. provided the loan that was priced at 75 basis points over Libor, or just shy of 90 basis points including fees, Bloomberg reported at the time.
The PIF, a key lever for the kingdom’s efforts to diversify the economy away from oil, has emerged as a global investor over the past few years as it pursues the goal of increasing its assets to about $1 trillion by 2025. It holds stakes in Uber Technologies Inc. and has backed electric vehicle maker Lucid Motors Inc.
