RIYADH, SAUDI ARABIA – The Public Investment Fund (PIF) on Thursday successfully priced its first dollar-denominated Shariah-compliant trust certificates (sukuk).
The total amount of the issuance is $3.5 billion, consisting of two tranches – a $2.25 billion, 5 years sukuk maturing in 2028 and a $1.25 billion, 10 years sukuk maturing in 2033.
The issuance will be listed on the London Stock Exchange’s International Securities Market (ISM).
The sukuk issuance was more than seven times oversubscribed, with orders exceeding $25 billion, reflecting investor confidence in PIF.
Proceeds from the issuance will be used by PIF for its general corporate purposes. Loans and debt instruments represent one of PIF’s sources of funding.
Other sources include retained earnings from investments, capital injections from the government and government assets transferred to PIF.
The sukuk was issued pursuant to PIF’s newly established international trust certificate issuance program.
It follows its two issuances of green bonds, under PIF’s medium-term capital raising strategy, 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 part of PIF’s strategy to diversify its funding sources.
Head of PIF’s Global Capital Finance Division Fahad AlSaif 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.”
He said, “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.”
PIF’s credit strength received international recognition in early 2022 when global credit rating agency Moody’s assigned PIF with a first-time issuer rating of A1 and a scorecard-indicated outcome, which is a measure of PIF’s credit strength on a standalone basis, of Aa2.
PIF’s scorecard-indicated outcome is the second highest globally among sovereign wealth funds that are rated by Moody’s.
Credit rating agency Fitch also assigned PIF, in early 2022, with a long-term issuer rating of A.
In 2023, Moody’s updated its outlook for PIF to “positive” from “stable,” and Fitch Ratings upgraded its long-term foreign and local-currency issuer default ratings to A+ from A, with a “stable” outlook.