Saudi Arabia’s PIF agrees to initial terms for $10 billion loan

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Bank of America Merrill Lynch, BNP Paribas as well as Crédit Agricole and Citigroup are among the 10 banks that have committed to provide the short-term loan to the Kingdom’s sovereign wealth fund (SWF).

Tuesday 16, July 2019 BY KUDAKWASHE MUZORIWA

Saudi Arabia’s Public Investment Fund (PIF) has agreed on the initial terms for a $10 billion loan from a syndicate of the world’s largest banks, as the Kingdom’s investment vehicle taps lenders for the second time in less than a year, reported Financial Times.

The wealth fund expects to pay back the loan towards the end of the year when Saudi Aramco makes the initial payment to the fund of the $69 billion it is paying the PIF for its majority stake in SABIC.

As the cornerstone of Crown Prince Mohammed bin Salman’s Vision 2030 economic diversification plans, the PIF faces vast funding needs such as the Neom, a $500 billion scheme to develop a futuristic city on the northwestern coast of Saudi Arabia.

Additionally, the sovereign wealth fund is also trying to establish new industries in sectors such as waste management and entertainment, alongside taking stakes in companies such as Tesla and Uber Technologies.

The Kingdom sovereign wealth fund is also an anchor investor in Softbank’s $93 billion Vision Fund, with a $45 billion commitment and bankers also expect PIF to invest in the Japanese bank’s second tech fund.

HSBC, JPMorgan together with Mizuho, MUFG as well as Standard Chartered Bank and Sumitomo Mitsui are the other banks participating in the $10 billion loan.

PIF plans to raise its assets under management (AUM) from $300 billion to $400 billion by the end of the decade and eventually hit $2 trillion by 2030.

TAGS : PIF, Kingdom Sovereign Wealth Fund, AUM, HSBC, JPMorgan, Mizuho, MUFG, Saudi Aramco, SABIC, Crown Prince Mohammed bin Salman, Bank of America Merrill Lynch

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