Saudi wealth fund raises year’s third-biggest loan for new deals

Saudi Arabia’s sovereign wealth fund obtained the third-biggest loan of the year so far as it raises money for new investments.

The Public investment Fund (PIF) signed the $15bn multi-currency revolving credit facility with 17 banks from Asia, the Middle East, Europe, the UK and the US, according to a statement on Wednesday.

The loan “provides PIF with access to additional capital that can be deployed at speed when convenient,” it said.

The facility is the biggest loan the PIF has ever secured. This year it’s behind only Verizon Communications’s $25bn deal signed last month and a $24bn loan announced by AerCap Holdings on Wednesday. The fund more than doubled the size of the amount it was planning to raise after initially targeting up to $7bn, Bloomberg reported last month.

The $400bn sovereign investor is key to the kingdom’s efforts to revive economic growth after a recession caused by the coronavirus pandemic and efforts to stabilise oil prices with output cuts by an alliance of producers led by Saudi Arabia and Russia.

Handed $40bn earlier this year to buy global stocks, the PIF plans to plow the same amount into the domestic economy this year and again in 2022.

The fund has also received cash injections in the form of the $30bn proceeds from the sale of shares in Saudi Aramco. The PIF is funded through a mixture of borrowing, cash and asset transfers from the government, and retained earnings from its investments. Chaired by Crown Prince Mohammed bin Salman and managed by Governor Yasir Al Rumayyan, the fund has outlined a plan to grow its assets to over SAR 4 trillion ($1.1 trillion) by 2025.