PIF official says debt-to-assets ratio less than 3%, new loan obtained at excellent rate

Fahad Al-Saif, Head of PIF's Global Capital Finance Division

The Public Investment Fund’s (PIF) debt-to-assets ratio is less than 3%, Fahad Al-Saif, Head of PIF's Global Capital Finance Division said, indicating that the fund enjoys a flexible policy that helps it access any of the global markets.

The new $17 billion loan obtained by the fund is with variable interest and excellent pricing. It is aimed for general uses as it is without guarantees and depends on the credit rating of the fund, Al-Saif added in an interview with Al-Arabiya.

It will be used to fully repay a previously-obtained $11 billion loan, after which the fund reaches the end of the financing plan for 2022.

PIF received applications from several international financial institutions. Therefore, it raised the number of participants of the syndicated loan from 15 financial institutions in 2018 to 25 during the current year, the official added.

He stated that this is not the first time for the fund to resort to private markets for syndicated loans. It resorted to them in 2018 to obtain a $10 billion five-year syndicated loan, maturing in 2023.

The Saudi sovereign fund’s financing strategy focuses on ensuring that assets match liabilities and maturity periods and that they are extended by more than possible periods. Accordingly, there is appropriate management of liabilities and assets.

The financing strategy adopted by the fund includes variable financing and fixed financing, Al-Saif indicated, noting that the PIF follows the money markets and interest rates continuously.

Meanwhile, he pointed out that this policy benefits the fund in the event of fluctuating interest rates locally and internationally. This is because the fund always estimates interest rates for the next five years.

According to data available on Argaam, PIF announced, on Nov. 30, securing a new $17 billion (SAR 63.75 billion), seven-year senior unsecured term loan. This represents the largest self-arranged term loan ever raised for general corporate purposes, supported by significant demand from an international syndicate.