PIF Secures $15 Billion Revolving Credit Facility

Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) on Wednesday said that it has obtained a $15 billion multi-currency revolving credit facility with as many as 23 international financial institutions from Europe, the US, Middle East and the US, for general corporate purposes.

This replaces the previous $15 billion revolving credit facility agreed in 2021. A revolving loan is one that can be drawn, repaid and drawn again during the agreed lending period.

The financing reflects PIF’s strong credit rating as well as robust demand from PIF’s relationship banks and financial institutions. Signing this facility represents a continuation of PIF’s strategy of using a diverse range of financing instruments, the PIF said.  

Loans and debt instruments represent one of PIF’s four sources of funding and the other three sources are capital injections from government, government assets transferred to PIF and retained earnings from investments. PIF is currently rated A1 by Moody’s with a positive outlook and A+ by Fitch with a stable outlook.

Tapping Bond Investors

According to a report from Bloomberg, the PIF, which is chaired by Saudi Arabia’s Prime Minister and Crown Prince H R H Mohammed Bin Salman, has already tapped bond investors twice this year, raising a total of $7 billion as it looks to push ahead with a massive investment plan intended to help diversify the Saudi economy away from its reliance on oil sales.

It aims to boost annual investment to $70 billion annually from this year, up from $40 billion to $50 billion a year, the report quoting PIF Governor Yasir Al Rumayyan 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, the report noted.

Earlier this year, the PIF received an additional 8% stake in Saudi Aramco – worth more than $160 billion – to help bolster its financial position and credit rating. That helped boost the fund’s assets to almost $1 trillion, the report said.