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PIF selling fresh sukuk + topping up green bond issuances? The Public Investment Fund (PIF) is reportedly gearing up to take a three-year USD 1.5 bn sukuk instrument to market, as the sovereign fund looks to bankroll its domestic growth plans, Bloomberg reports, citing unnamed sources. The fund is also reportedly looking to sell an additional USD 500 mn in green bonds due to mature in 2023, the business information service says. This would be the fourth time in 2024 for the PIF to tap the bond market. Reuters also had the story.
REMEMBER- The PIF issued its maiden green bonds in December 2022, which included a 10-year tranche. The issuance saw the sale of USD 1.25 bn-worth of the 10-year notes. It appears the additional green bonds are a top-up of the 2022 issuance, with the notes representing “a ‘tap’ — reopening an existing transaction for subscription,” Reuters notes.
The details: The sukuk issuance will offer a yield of 75 basis points over US Treasuries, down from an initial target of 110 basis points. Investors have reportedly placed 3x more orders than the amount of the issuance at USD 4.7 bn. Meanwhile, the green bonds will carry a yield of 107 basis points above US Treasuries, and investors have reportedly placed orders worth USD 3.5 bn for the USD 500 mn tap issuance.
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Financing needs: The fund needs USD 22 bn for 2024 to cover its investment plans — less than half of what it has already been raised through bond sales this year, Bloomberg reports citing Morgan Stanley’s strategist Pascal Bode.
REMEMBER-The PIF raised USD 7 bn since the start of the year from two debt sales, while also securing a USD 15 bn refinancing facility last week.
ADVISORS- Our friends at HSBC Holdings are joint bookrunners alongside Goldman Sachs, and JP Morgan Chase & Co, according to Bloomberg.
