Saudi wealth fund said to pre­pare to sign $11bn loan

Muscat Daily - - BUSINESS -

Dubai, UAE - Saudi Ara­bia’s sov­er­eign wealth fund will sign an US$11bn loan this week, mark­ing its first-ever bor­row­ing, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

Some of the big­gest global lenders in­clud­ing Gold­man Sachs Group Inc, HSBC Hold­ings Plc and JPMor­gan Chase & Co are pro­vid­ing the loan that’s priced at 75 ba­sis points over Li­bor, or just shy of 90 ba­sis points in­clud­ing fees, said the peo­ple, ask­ing not to be iden­ti­fied. Lon­don- based bou­tique Verus Part­ners is ad­vis­ing the Pub­lic In­vest­ment Fund (PIF) on the talks, the peo­ple said.

The deal will give the PIF ad­di­tional cash af­ter two years of ma­jor new in­vest­ments. Last year, it an­nounced plans to in­vest as much as US$45bn in a tech­nol­ogy fund run by Ja­pan’s SoftBank Group Corp, put US$20bn into a US in­fra­struc­ture fund man­aged by Black­stone Group LP and build a US$500bn city called Neom on the Red Sea.

Spokes­men for the PIF and Verus Part­ners de­clined to com­ment.

Fu­ture deals

The debt is priced the same as a US$16bn loan ar­ranged by the Saudi gov­ern­ment in March from a sim­i­lar group of banks. The PIF started ap­proach­ing banks in July, peo­ple fa­mil­iar with the mat­ter said at the time. The fund planned to es­tab­lish a group of banks with which it would work on fu­ture deals, they said.

Mor­gan Stan­ley, Cit­i­group Inc, Stan­dard Char­tered Plc, BNP Paribas SA, So­ci­ete Gen­erale SA, Mizuho Bank Ltd, MUFG, Credit Agri­cole SA, SMBC, Bank of Amer­ica, Bank of China Ltd and In­dus­trial & Com­mer­cial Bank of China Ltd also par­tic­i­pated in the loan, the peo­ple said.

The PIF is will­ing to bor­row to di­ver­sify the king­dom’s oil- de­pen­dent econ­omy and boost re­turns from in­vest­ments, man­ag­ing direc­tor Yasir al Ru­mayyan said last year.

The fund hired for­mer Bank of Amer­ica Mer­rill Lynch man­ag­ing direc­tor Alireza Zaimi as head of cor­po­rate fi­nance and trea­sury last year to work on its bor­row­ing plans. It’s also in talks to sell its stake in chem­i­cal pro­ducer Saudi Ba­sic In­dus­tries Corp to oil gi­ant Saudi Aramco, which could raise as much as US$70bn.

The PIF plans to be­come the world’s big­gest sov­er­eign fund, con­trol­ling more than US$2tn by 2030.

The deal will give Saudi Ara­bia’s Pub­lic In­vest­ment Fund ad­di­tional cash af­ter two years of ma­jor new in­vest­ments

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