The Public Investment Fund (PIF) and Korea Trade Insurance Corporation (K-SURE) have signed a financing agreement through which PIF has raised a term loan from a syndicate of nine top international lenders that will be covered by K-SURE.
The financing carries a door-to-door tenor of 13 years and will initially be sized at $3 billion, with an option to increase to $5 billion, subject to pre-agreed terms and conditions. The transaction will mark PIF’s first financing covered by an export credit agency, as it continues to diversify its sources of funding.
PIF and K-SURE previously signed a memorandum of understanding in March 2022 in which they expressed their mutual intention to strengthen their partnership and cooperation, and which resulted in achieving, among other matters, this K-SURE covered term loan. The collaboration between PIF and K-SURE aims to promote the export of Korean goods and services into various projects and subsidiaries either partially or fully owned by PIF while strengthening economic partnerships.
“This collaboration with K-SURE underscores PIF’s commitment to foster institutional partnerships as we continue to deliver on our medium-term capital raising strategy. The financing is part of PIF’s four primary sources of funding and strengthens economic ties between Saudi Arabian and South Korean businesses.”
President of K-SURE, Mr. Inho Lee said that “Through this financial support, Korean companies have not only gained technological competitiveness but also financial competitiveness to increase orders. We trust this support will contribute to strengthening the future-focused partnership between the two countries.”
This financing follows PIF’s recent international sukuk issuance amounting to $3.5 billion, two green bond issuances amounting in aggregate to $8.5 billion, including the first-ever century green bond and the first ever green bond issued by a sovereign wealth fund, as well as a $17 billion corporate loan in 2022 as PIF sources loans from an expanding range of options.
Loans and debt instruments are one of PIF’s main sources of funding. Other sources include retained earnings from investments, capital injections from government and government assets transferred to PIF. PIF is rated A1 by Moody’s with a positive outlook and A+ by Fitch with stable outlook.
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