Saudi Arabia’s PIF to seek up to $7bn loan for new investments

By Rahul Vaimal, Associate Editor
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Saudi Arabia
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The sovereign wealth fund of Saudi Arabia is planning to raise about $7 billion in loans as it seeks cash for new investments, according to people familiar with the matter.

The Public Investment Fund (PIF) has already started talks with international banks to join in a US dollar revolving facility of between $5 billion and $7 billion. The PIF is planning to close the fundraising by early next year and to make profitable investments with it.

The final size of the loan will depend on the response from banks, people related to the matter said. While the wealth fund refused to respond to the information.

If the deal completes successfully, it would be the third time the public fund has collaborated with international banks for financial support. In 2018, PIF initially raised $11 billion as a loan and it repaid a $10 billion bridge loan in August, two months before the schedule.

The $347 billion sovereign funds are a key support for Saudi Arabia’s efforts to revive growth after the deepest recession the country has faced since 1987. Earlier this year PIF handed $40 billion to buy global stocks and it plans to invest the same amount into the domestic economy in 2021 and 2022.

The fund, under the leadership of Yasir Al Rumayyan, has changed its focus over the past five years from being a domestic holding company to an international investment firm. Currently, its financing strategy includes cash or asset transfers from the government, borrowing and retained earnings.

PIF has invested nearly $8 billion in US equities in March, taking benefit of the global market collapse. Later, the fund sold most of them off when the markets rebounded.