#Saudi Borrowing Spree Accelerates as PIF Debuts Euro Green Bond - Bloomberg

Saudi Borrowing Spree Accelerates as PIF Debuts Euro Green Bond - Bloomberg

Saudi Arabia’s sovereign wealth fund mandated banks for its first euro-denominated green bond sale, signaling no let up in the recent wave of borrowing activity aimed at financing the kingdom’s economic transformation plans.

The Public Investment Fund is looking to sell notes in three and seven year tranches, according to a person familiar, who asked not to be identified discussing private information. It would be the fund’s first sale of notes done in euros and its only green bond sale so far this year.

Any final sale would follow a $2 billion dollar bond issuance last month and come quick on the heels of the PIF’s deal with Silver Lake Management and Affinity Partners to acquire Electronic Arts Inc. in the largest leveraged buyout on record. The PIF was the biggest contributor of equity to the transaction, Bloomberg reported.

The PIF is the main entity tasked with executing Crown Prince Mohammed bin Salman’s Vision 2030 agenda to diversify revenues away from oil. It has been increasingly diversifying its funding mix to support those goals, having recently launched a commercial paper program on top of regular bond sales.

The fund has also been selling down stakes in portfolio firms and looking to list some of its companies as a means to come up with more cash, Bloomberg has reported.

The PIF is expected to soon unveil a new long-term investment plan as it looks to bolster returns, while also supporting the economy and driving local investment. The International Monetary Fund expects the fund to continue spending at least $40 billion a year on domestic investment.

Any new issuance by the PIF would add to a series of Saudi bond sales this year. The government has already sold $20 billion of dollar- and euro-denominated debt, putting it on course for a record year of issuance and making it one of the heaviest borrowers in emerging markets.

Banks are also borrowing at a rapid clip, while companies are pursuing more syndicated loans. That comes as subdued oil prices add pressure on the kingdom’s finances, complicating efforts to diversify the economy. The government has projected it will run a deeper budget deficit this year than previously expected.

The PIF tapped Crédit Agricole, JPMorgan Chase & Co. and Societe Generale as joint global coordinators on a possible green bond offering, with a series of investor calls organized for today.