The Public Investment Fund (PIF) of Saudi Arabia has disclosed pricing details for its inaugural dollar-denominated trust certificates compliant with Shariah law, known as Sukuk. The total value of this issuance amounts to $3.5B and comprises two segments:
- $2.25B, with a maturity period of five years, is set to mature in 2028.
- $1.25B, maturing over a ten-year period and concluding in 2033.
These sukuk certificates are set to be listed on the International Securities Market (ISM) of the London Stock Exchange. The strong investor response to this issuance, which was over seven times oversubscribed, with orders surpassing $25B, underscores the confidence in PIF.
Sukuk Proceeds Bolster PIF’s Corporate Needs and Funding Diversity
The proceeds generated from this Sukuk issuance will be utilised by PIF for its general corporate needs. Loans and debt instruments constitute one of the sources of funding for PIF, in addition to retained earnings from investments, government capital injections, and the transfer of government assets to PIF.
This issuance aligns with PIF’s recently established international trust certificate program and follows two green bond offerings worth a combined total of $8.5B as part of PIF’s medium-term capital-raising strategy.
These bonds included the inaugural century green bond and the first-ever green bond issued by a sovereign wealth fund. PIF also secured a $17B corporate loan in 2022, in line with its strategy to diversify sources of funding.
Head of PIF’s Global Capital Finance Division Fahad Al Saif said: “This inaugural international sukuk issuance is another milestone for PIF’s medium-term capital raising strategy and a continuation of our efforts to diversify our funding sources.
“The high level of investor demand validates PIF’s robust credit profile, which we are determined to maintain and enhance.”
“The success of this transaction also reflects PIF’s ongoing commitment to delivering on its mandate and Vision 2030 targets.”
Moody’s Recognizes PIF’s Credit Strength with A1 Rating in 2022
In early 2022, the Public Investment Fund (PIF) achieved international recognition for its creditworthiness when Moody’s, a leading global credit rating agency, conferred an initial issuer rating of A1 on PIF.
Furthermore, PIF’s credit strength, as indicated by the scorecard outcome, was rated at Aa2, signifying its creditworthiness on a standalone basis. This scorecard outcome ranks PIF as the second-highest globally among sovereign wealth funds evaluated by Moody’s.
In the same timeframe, another credit rating agency, Fitch, also granted PIF a long-term issuer rating of A, according to WAM.
Moving into 2023, Moody’s updated its outlook for PIF from “stable” to “positive.” Concurrently, Fitch Ratings elevated PIF’s long-term foreign and local-currency issuer default ratings to A+ from A, maintaining a “stable” outlook.
