Saudi wealth fund ‘not in a hurry’ to issue bonds, considers funding options

RIYADH: Saudi Arabia's sovereign wealth fund Public Investment Fund (PIF) is "not in a hurry" to issue bonds but is assessing several funding options, an executive said on Thursday.

The PIF has been given the task of helping to deliver the so-called Vision 2030 reform plan, an ambitious economic programme announced by the government in 2016 designed to free the kingdom from dependence on oil exports.

Last year the fund raised an $11 billion international syndicated loan, its first commercial borrowing, and sources told Reuters this month it has been in talks with banks to raise a short-term bridge loan for as much as $8 billion to use for new investments.

"We have a programme we defined back in 2017 in terms of long-term strategic funding plans for PIF. Within that plan we look at all instruments, we assess pros and cons and we action and execute if they make sense to us," Alireza Zaimi, executive director, head of corporate finance division at PIF told a financial conference in Riyadh on Thursday.

The fund, which has more than $250 billion in assets and is the main vehicle for Crown Prince Mohammed Bin Salman's plan to diversify economy away from oil, will receive $69.1 billion from the sale of its 70 percent stake in Saudi petrochemicals company Saudi Basic Industries Corporation (SABIC) to Aramco.

It is also due to receive the proceeds of a planned initial public offering of the Saudi state-owned oil giant.

"There are plenty of cash flows that are coming through these two liquidity events, therefore we assess all instruments, but are we in a hurry to issue a bond in the market? No we're not in a hurry," Zaimi said.

Proceeds from the SABIC deal, which Aramco has said is expected to close in 2020, could take a few months to come through to the PIF, while a document seen by Reuters said the oil giant will pay for the deal in tranches.

The bridge loan that PIF has been discussing, and that could go up to $8 billion, could be for a period of less than one year and will be repaid from the proceeds PIF gets from the SABIC sale, sources said this month.