Saudi Arabia Issues $4 Billion Bonds as Debt Spree Continues
Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), has sold $4 billion in dollar-denominated bonds.
The issuance includes two tranches:
* 5-year notes priced at a spread of 95 basis points (bps) above US Treasuries
* 9.5-year notes priced at a spread of 110 bps above US Treasuries
Both tranches were priced 30 bps lower than initial guidance, reflecting strong demand from investors. Order books exceeded $16 billion, with demand split evenly between the two notes.
The PIF's bond sale follows a $12 billion issuance by the Saudi government earlier this month and a $7 billion Islamic loan signed by the PIF with 20 banks.
Saudi Arabia has been a prolific bond issuer in recent years, driven by its spending plans related to Vision 2030, Crown Prince Mohammed bin Salman's initiative to diversify the economy from oil. To fund these plans, the kingdom has run a budget deficit and increased its debt issuance.
The PIF is responsible for executing Vision 2030 and plans to boost local investments, including in artificial intelligence, to $70 billion annually from 2023.