Saudi Arabia’s Public Investment Fund has been assigned debut ratings by agencies Fitch and Moody’s as the government-owned $500bn sovereign fund prepares to extend credit facilities and raise public debt to fund its massive spending and investment commitments at home and abroad.
Fitch Ratings issued PIF with a long-term default rating of A, with a stable outlook. Moody’s gave an A1 long-term rating baseline credit assessment. Both agencies issued their ratings based on the creditworthiness of the government of Saudi Arabia, which owns PIF and is very likely to support the sovereign wealth fund, if needed.
The ratings are a precursor to the fund potentially launching “green bonds” and extending $15bn in bank facilities as the PIF seeks to raise more debt, alongside tapping the kingdom’s oil revenues, to fund Crown Prince Mohammed bin Salman’s ambitious domestic development plans that aim to plan for a future beyond oil.
“PIF has evolved into becoming one of the kingdom’s main vehicles to grow the kingdom’s non-oil economy and reduce its reliance on the hydrocarbon sector,” Moody’s said. PIF had been mandated to expand its assets, unlock new sectors for the country, bring in cutting edge technology and build partnerships at home and abroad, it added.
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