Saudi wealth fund braces to sign $11 billion loan

dubai — Saudi Arabia’s sovereign wealth fund will sign a $11 billion 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, HSBC Holdings and JP Morgan 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. London-based boutique Verus Partners is advising the Public Investment Fund on the talks.

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 $45 billion in a technology fund run by Japan’s Soft Bank Group, put $20 billion into a US infrastructure fund managed by Blackstone Group and build a $500 billion city called Neom on the Red Sea.

The debt is priced the same as a $16 billion 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, Standard Chartered, BNP Paribas, Societe Generale, Mizuho Bank, MUFG, Credit Agricole, SMBC, Bank of America, Bank of China and Industrial & Commercial Bank of China also participated in the loan, the people said. —