The Saudi Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has successfully raised $5.5 billion through the sale of its first green bond. The proceeds will be used to finance projects that promote sustainable development and reduce environmental impact. The bond was oversubscribed by more than double the amount, demonstrating strong investor interest in the fund and its commitment to environmental initiatives. The PIF will focus on transitioning its investments towards green projects, with the green bond providing a solid base to draw from in the future.
(Bloomberg) —
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The sovereign wealth fund of Saudi Arabia raised $5.5 billion from a three-part green bond sale, the Public Investment Fund’s second debt offering in four months.
The PIF secured orders worth more than $32 billion for the 7-, 12- and 30-year bonds, according to people familiar with the matter, who asked not to be named. The bond deal is said to be priced 115, 145 and 185 basis points above US Treasuries.
The wealth fund raised $3 billion in October with its first dollar bond sale, which also marked its first foray into ethical finance. The government of Saudi Arabia, which controls the PIF, tapped into the debt market in January, raising $10 billion through its first Eurobond sale of 2023.
The PIF plans to use the proceeds for general corporate purposes and to fund, refinance and invest in green projects.
Strong bond yields and falling borrowing costs in high-quality bond markets helped fuel an unprecedented bonanza of debt selling around the world, with a number of companies and governments tapping into the sustainable bond market for the first time.
Sales of green bonds, the largest category of sustainable debt by volume issued, rose to $57.2 billion in January, the highest since November, when borrowers raised $58.7 billion. The Indian government has borrowed $1 billion in its first green government bond issue to fund the clean energy transition.
Read more: Saudi Arabia plans more sales of fixed-rate debt and non-dollar bonds
Goldman Sachs Group Inc., JPMorgan Chase & Co., Standard Chartered Bank, BofA Securities, BNP Paribas, Citigroup, First Abu Dhabi Bank, HSBC Bank, Morgan Stanley, Credit Agricole CIB, GIB Capital, ICBC International Securities, Mizuho, SMBC Nikko and Societe Generale managed the PIF offering.
–Assisted by Shaji Mathew.
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