RIYADH: Saudi Arabia’s Public Investment Fund has secured a term loan of $5 billion from a group of nine international lenders, covered by the Korea Trade Insurance Corp. This agreement signifies PIF's ongoing effort to diversify its funding sources in a strategic manner.
This financing arrangement, with a tenor of 13 years, initially set at $3 billion and expandable to $5 billion, marks PIF’s first venture into funding covered by an export credit agency.
Building on a memorandum of understanding signed in March 2022, PIF and K-SURE have translated their intentions into action, resulting in this significant K-SURE-covered term loan.
Fahad Al-Saif, head of the global capital finance division at PIF, said: “This collaboration with K-SURE underscores PIF’s commitment to foster institutional partnerships as we continue to deliver on our medium-term capital raising strategy.”
He added: “The financing is part of PIF’s four primary sources of funding and strengthens economic ties between Saudi Arabian and South Korean businesses.”
The collaboration aims to facilitate the export of Korean goods and services into projects and subsidiaries, either partially or fully owned by PIF, strengthening economic ties.
“Through this financial support, Korean companies have not only gained technological competitiveness but also financial competitiveness to increase orders,” said Inho Lee, president of K-SURE.
He added: “We trust this support will contribute to strengthening the future-focused partnership between the two countries.”
The deal follows PIF’s recent financial activities, including an international sukuk issuance of $3.5 billion, two green bond issuances totaling $8.5 billion, and a $17 billion corporate loan in 2022.
These diverse funding initiatives align with PIF’s strategy to source capital from an expanding range of options, with loans and debt instruments being one of its primary sources.
Beyond financial instruments, PIF drew funding from retained earnings from investments, capital injections from the government, and the transfer of state assets to PIF.
The fund holds a strong credit rating, with Moody’s allocating it “A1” with a positive outlook and Fitch giving it “A+” with a stable outlook, reinforcing its financial strength and stability.
