Saudi Arabia’s Public Investment Fund (PIF) has sold $1.25 billion in 7-year sukuk, tapping the bond market for the second time this year.
The sovereign wealth fund was able to lower the price guidance to 110 basis points (bps) over US Treasuries from 140 bps over the same benchmark released earlier in the day after the debt attracted over $8.2 billion in orders, the lead bank said.
Saudi Arabia, with its wealth linked inextricably to oil revenue, faces mounting pressure to raise debt or cut spending after a plunge in crude prices, complicating plans to fund an ambitious agenda to diversify its economy.
The International Monetary Fund and economists estimate Riyadh needs oil prices of over $90 a barrel to balance its budget. Benchmark Brent was trading at $63.48 a barrel at around 15:35 GMT on April 30.
To make things even more complicated, Saudi Crown Prince Mohammed bin Salman — who also chairs the fund — has promised $600 billion in trade and investment with the US over the next four years. US president Donald Trump has asked Saudi Arabia to invest $1 trillion in the US.
PIF last tapped the debt markets in January, raising $4 billion from a two-tranche deal.
Last week, Reuters reported through sources that Gulf issuers, including Saudi Arabia’s $925 billion sovereign wealth fund, are preparing a series of bond offerings despite market volatility caused by Trump’s tariff policies.
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