#Saudi’s Sovereign Wealth Fund Refinances $15 Billion Loan - Bloomberg

Saudi’s Sovereign Wealth Fund Refinances $15 Billion Loan - Bloomberg

Saudi Arabia’s sovereign wealth fund has signed a $15 billion revolving credit facility with a group of banks, replacing a previous funding agreement it reached in 2021.

The Public Investment Fund, chaired by Crown Prince Mohammed bin Salman, said the loan has a tenor of three years, with an option to extend by up to two more years. The financing will be provided by a group of European, US, Middle East and Asian banks, according to a statement Wednesday.

The PIF, as the fund is known, has spent much of the year hunting for new sources of cash as it looks to push ahead with a massive investment plan intended to help diversify the Saudi economy away from a reliance on oil sales. It’s already tapped bond investors twice this year, raising a total of $7 billion, and it’s also looked to accelerate debt sales and equity offerings in its portfolio companies.

The effort to obtain more cash comes as the fund is aiming to boost annual investment to $70 billion annually from this year, up from $40 billion to $50 billion a year.

Even though the fund plans to ramp up annual spending, executives at alternative investment firms have privately expressed concerns that the PIF will channel more money into local mega-projects, Bloomberg previously reported. That could lead to a pivot away from passive investments in global private equity, infrastructure and hedge funds, people familiar with the matter said.

With the Saudi budget in deficit for much of the last decade, there’s less scope to fund the PIF with transfers of excess oil revenue. As a result, the investor has said it will also rely on asset transfers from the government, retained earnings from its investments, and borrowing.

Earlier this year, the fund received an additional 8% stake in Saudi Aramco - worth more than $160 billion - which PIF Governor Yasir Al Rumayyan also chairs, to help bolster its financial position and credit rating. That helped boost the fund’s assets to almost $1 trillion.