FILE PHOTO: Governor of the Saudi Public Investment Fund, Yasir Othman Al-Rumayyan speaks during the fourth annual Future Investment Initiative in Riyadh, Saudi Arabia, January 27, 2021. REUTERS/Ahmed Yosri
February 3, 2022
By Yousef Saba and Saeed Azhar
DUBAI (Reuters) – Saudi Arabia’s sovereign wealth fund is in talks with banks to exercise an extension option on a $15 billion revolving credit facility it took out in March last year, two sources with direct knowledge of the matter said.
The Public Investment Fund’s one-year loan was provided by 17 banks and has four extension options.
Sources previously said the loan would be used for general corporate purposes. A revolving loan is one that can be drawn, repaid and drawn again during the agreed lending period.
PIF, which is chaired by Crown Prince Mohammed bin Salman and is the engine of his economic transformation plans for Saudi Arabia, declined to comment.
“The lenders obviously have the right to say no when they come and ask for an extension, but given that it’s a relationship facility, given everything that’s happening in Saudi and how much business people are chasing with PIF, I think they’ll get most of the banks – if not all of them – rolling their exposures over,” one of the sources said.
PIF, which manages about $480 billion in assets, is at the centre of Saudi Arabia’s Vision 2030, a national strategy aimed at diversifying the economy and cutting the kingdom’s reliance on hydrocarbons.
The sovereign wealth fund started raising bank debt in 2018 with an $11 billion facility, followed in 2019 by a $10 billion loan, which it then repaid in 2020.
The banks involved in the loan were BNP Paribas, Bank of America, Citi, Credit Agricole, Credit Suisse, Deutsche Bank, First Abu Dhabi Bank, Goldman Sachs, HSBC, Intesa Sanpaolo, JPMorgan, Mizuho, Morgan Stanley, Natixis, SMBC, Societe Generale and Standard Chartered, sources have previously said.
Fitch Ratings on Wednesday assigned PIF an ‘A’ credit rating, in line with the sovereign’s, and said it expected the fund to gradually tap the international debt markets.
Reuters reported last year that PIF was setting up an environmental, social and governance (ESG) framework under which it is likely to issue multibillion-dollar green bonds.
Its governor, Yasir al-Rumayyan, said in September PIF was working with BlackRock on the framework and planned to announce its debut green bonds “soon”, without providing details.
(Reporting by Saeed Azhar and Yousef Saba; Editing by Kim Coghill)