Saudi sovereign wealth fund raises $10bn bridging loan pending SABIC proceeds

The Public Investment Fund (PIF), the growing Saudi Arabian sovereign wealth fund, has clinched a $10 billion (SR37.5 billion) bridging loan via a syndicate of 10 international banks. All announced at the Future Investment Initiative. (Photo: FII)
Updated 31 October 2019

Saudi sovereign wealth fund raises $10bn bridging loan pending SABIC proceeds

  • Saudi Arabian sovereign wealth fund has clinched $10 billion ridging loan
  • Loan will be repaid following completion of the SABIC-Aramco transaction

RIYADH: The Public Investment Fund (PIF), the growing Saudi Arabian sovereign wealth fund, has clinched a $10 billion (SR37.5 billion) bridging loan via a syndicate of 10 international banks, including three Japanese financial institutions.

The loan will tide the PIF over in terms of general corporate expenses and investment requirements until the proceeds from the $69 billion sale of its shares in SABIC (the Saudi diversified manufacturing company) to Saudi Aramco come through, it was announced at the Future Investment Initiative (FII) forum in Riyadh.

Yasir Al-Rumayyan, governor of the PIF, said: “The agreed sale of the PIF’s stake in SABIC is anticipated to realize a significant level of capital to be redeployed according to the PIF’s mandate. However, the regulatory requirements ahead of completion mean there is likely to be a period of delay before the PIF is able to redeploy that capital.

“This bridge loan will enable us to accelerate the implementation of our ambitious investment program while ensuring that we maintain a conservative level of leverage,” he added.

The loan will be repaid following completion of the SABIC-Aramco transaction.

The PIF said in its Program 2018-2020 document, launched at the first FII in October 2017, that its four sources of funding were capital injections by the government, asset transfers from the government, retained investment returns, and PIF loans and debt instruments independently issued by the fund.

Illustrative of the growing financial relationship between the Kingdom and Japan, three of the 10 banks in the international syndicate that financed the loan were Tokyo based, namely Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation.

The others were Bank of America Corporation, BNP Paribas, Citigroup, Credit Agricole CIB, HSBC, J.P. Morgan, and Standard Chartered.

The Kingdom has been increasingly encouraged to tap international markets for loans and bond finance. Earlier this year, Aramco raised $12 billion in a global issue that attracted interest worth more than $100 billion.


Proposals to cut expats in Kuwait reviewed by National Assembly committee

Updated 10 August 2020

Proposals to cut expats in Kuwait reviewed by National Assembly committee

  • One of the seven plans submitted by members of parliament calls to set a percentage for each migrant community in the country
  • The Kuwaiti government’s plan calls to replace about 160,000 expat working in the public sector with nationals

DUBAI: Thousands of expats in Kuwait are expected to leave the country as talks over the decision have started between the government and the National Assembly human resources committee.
The government and parliamentary proposals are being reviewed by the committee, national daily Kuwait Times reported.
One of the seven plans submitted by members of parliament calls to set a percentage for each migrant community in the country.
The Kuwaiti government’s plan also calls to replace about 160,000 expat working in the public sector with nationals, but did not provide a timeframe.
The proposal also suggests that about 370,000 expats who show a “negative impact” on the country or are illegal residents can be dismissed by taking short-term measures.
The government added in its plan that “marginal” workers should be reduced by 25 percent. It also expects to lower temporary employment contracts by 30 percent in government jobs.
The government also discussed the massive increase in the expat population in the country between 2005 and 2019, as it went up to 4.42 million. It added that during this time, the citizens’ population increased from 860,000 to 1.335 million.