The Saudi Public Investment Fund is heading to attract a broader group of investors, and seeks to sell debt bonds through his subsidiaries, in light of its endeavor to face spending aspirations in the Kingdom, according to Bloomberg.
The Saudi Sovereign Fund is studying the issuance of euros -established bonds for the first time this year, and plans to benefit from local American investors for the first time, according to Bloomberg’s sources of sources described as well.
An independent borrowing
The Fund encourages its subsidiaries to borrow independently, and it is possible that NEOM and Afilis are among the companies that issue debts, Bloomberg quoted sources that refused to disclose its identity.
One of the sources said that these plans are a step towards a new long -term financing strategy for the 925 billion dollars in the entity, which seeks to reduce the need for additional funding from the Saudi government.
The fund, which is the main entity assigned to the Vision 2030 program for Saudi Crown Prince Mohammed bin Salman, raised $ 4 billion from the debt markets in January, and was followed by its mining unit with an Islamic instruments of $ 1.25 billion last month.
Any new releases are added to the 14.3 billion dollars that the Kingdom has gone so far this year, and the borrowing wave that has made the Kingdom will be prolonged one of the most prominent exporters of bonds in emerging markets during the past two years.
Project priorities
The Kingdom’s spending during the next few years includes, as well as the expenses of events such as the 2034 FIFA World Cup, and these obligations have paid – in light of the slowdown in foreign direct investment, the decrease in oil prices and the continued budget deficit – the government to re -arrange projects priorities, according to Bloomberg.
Saudi Arabia needs the price of oil about 108 dollars per barrel to finance its spending after taking local investments by the Public Investment Fund into consideration, according to Bloomberg Economics, and this is much higher than the current prices of about $ 70 a barrel.
The Saudi crown prince had pledged to engage in a $ 600 billion trade and investment with the United States, according to Bloomberg.
The Public Investment Fund plans to increase its annual investments to 70 billion dollars, which is funded by a mixture of profits detained from its investments, borrowing, cash transfers or assets from the government, however, it is expected that the profits of Saudi Aramco, in which the fund has a 16%stake, after the giant oil company has reduced its annual distributions.
Informed sources suggested that the fund explore additional options, including selling a small part of its wallet from the listed shares of $ 461 billion, and the fund may also include companies on the local stock exchange.
The deals under preparation include Nobco Medical Procurement Company, the Saudi Central Reading Company, and the Saudi International Ports Company, according to Bloomberg.
