PIF finalises $10bn loan terms

Saudi Arabia’s sovereign wealth fund has reportedly agreed the terms of a $10 billion loan it is seeking from a number of investment banks. According to Bloomberg, the Public Investment Fund (PIF) will pay 30 basis points over the Libor for the loan, which is reportedly half the rate of its first borrowing – an $11 billion loan from banks in 2018. The terms of that deal, the PIFs first ever loan, were 75 basis points but for a five year term. The latest financing is a one year bridge loan with an option to extend by an additional 12 months and is intended to provide the fund with liquidity ahead of the sale of its stake in Saudi Basic Industries (Sabic) to state energy company Saudi Aramco. Repayment of the loan will come from the proceeds of the Sabic sale with Saudi Aramco due to pay $70 billion for the PIF’s 70% share.  The fund is a central part of the government’s effort to wean the economy away from oil under a plan known as Vision 2030. The fund aims to control more than $2 trillion by that date and currently has assets of about $320 billion, according to the Sovereign Wealth Fund Institute. ©2019 funds global mena

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