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Saudi Arabia’s PIF hires banks for debut green bonds issuance

Person, Human, Clothing REUTERS/Ahmed Yosri
PIF has raised tens of billions, including a $17 billion loan in November, to fund an investment programme to create new industries and jobs

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has hired banks including Citi and JPMorgan to arrange a debut issuance of multi-tranche US dollar-denominated green bonds, a document showed on Tuesday.

Sources told Reuters earlier this month that PIF would issue the long-planned green bonds this month or in October.

BNP Paribas, Citi, Deutsche Bank, Goldman Sachs and JPMorgan, mandated as joint global coordinators and active bookrunners, will organise investor calls starting on Tuesday.

A debut issuance in tranches of five, 10 and potentially a longer-dated tenor will follow, subject to market conditions. The issuance will be under GACI First Investment Company and guaranteed by PIF.

PIF has $608 billion in assets under management, according to an investor presentation seen by Reuters, not including the February transfer of a four percent stake in oil giant Aramco to the fund.

“PIF is acting as the key vehicle to achieve KSA (Kingdom of Saudi Arabia) green aspirations,” the presentation said, referring to an ambitious economic reform agenda to wean the economy off oil.

The fund, which aims to grow its assets under management to more than $1 trillion by 2025, expects to invest over $10 billion by 2026 in eligible green projects, including renewable energy, clean transport and sustainable water management, the presentation said.

This includes $4.4 billion for NEOM, a futuristic city being built in the desert.

Saudi Crown Prince Mohammed bin Salman said in July its first phase would cost SAR 1.2 trillion ($318.98 billion), and that it would be publicly listed in 2024.

PIF had $21 billion in gross debt at the end of June and $45 billion in cash and cash equivalents. It also had $86 billion in treasury assets and $5 billion undrawn from a revolving credit facility, from which $10 billion was withdrawn in June, the presentation showed.

Credit Agricole, First Abu Dhabi Bank, HSBC, Mizuho, SMBC Nikko, SNB Capital , Societe Generale and Standard Chartered are also active bookrunners on the green bonds.