Arab Energy Fund Raises $600M in Bond Sale Amid Heavy Market Supply

RIYADH: The Arab Energy Fund, a multilateral banking institution, sold $600 million of bonds after drawing robust demand that allowed it to tighten pricing despite one of the busiest weeks for new debt globally. 

The five-year notes, priced at the Secured Overnight Financing Rate plus 75 basis points, will mature in February 2031, the Riyadh-headquartered lender said in a statement. Investor orders were twice the planned size, prompting the fund to upsize the deal to $600 million. 

This was TAEF’s fourth public benchmark issuance in 2025, highlighting its continued presence in international markets. The broad investor interest reflects its growing role in financing the region’s energy sector. 

“This issuance is a testament of investors’ confidence in The Arab Energy Fund’s solid credit profile,” said Vicky Bhatia, chief finance officer of The Arab Energy Fund. “Their continued trust has enabled us to reprice our curve in line with our funding strategy.” 

Investor appetite helped TAEF price the bonds about 20 basis points inside prevailing secondary levels, even as more than 40 other deals were announced globally around the same time. The transaction also saw 10 basis points of tightening during book-building. 

Buyers included central banks, sovereign wealth funds, supranational institutions and agencies, with strong participation from both the Middle East and North Africa and international investors. 

Established in 1974 by ten Arab oil exporters, TAEF provides debt and equity financing across the energy value chain and has integrated environmental, social and governance practices into its $5.8 billion loan portfolio.

At the corporate level, the Fund has adopted broad ESG practices that are embedded across its portfolio, workforce and operations. These include $1.3 billion in sustainability-linked financing within a $5.8 billion loan book. 

The fund holds long-term credit ratings of Aa2 from Moody’s, AA+ from Fitch and AA- from S&P — the highest for any energy-focused financial institution in the Middle East and North Africa.