2025-10-08
Saudi Wealth Fund Sells First Euro Bond Amid Borrowing Push
Saudi Arabia’s Public Investment Fund, through its financing arm Gaci First Investment Co, sold €1.65bn ($1.9bn) across two tranches yesterday in its first euro-denominated bond offering.
The offering is split between €800mn of three-year notes and €850mn of seven-year notes, according to a person familiar with the matter.
The deal drew strong investor demand as the sovereign wealth fund continues to tap global markets to finance the kingdom’s economic transformation drive. Orders peaked at more than €8.7bn, with final books totalling over €6.9bn — including about €3.1bn for the three-year tranche and €3.8bn for the seven-year, the person said.
Final pricing tightened to 58 basis points over mid-swaps for the 2028 tranche and 90 basis points for the 2032 notes, after initial indications of 90–95 basis points and about 125 basis points, respectively. The deal is expected to be rated Aa3 by Moody’s and A+ by S&P.
The strong demand underscores investor appetite for Saudi debt, even as the Gulf nation increases issuance amid lower oil prices and elevated spending.
The sale follows a dollar bond issuance last month, as the PIF diversifies its funding sources to support investments under Crown Prince Mohammed bin Salman’s Vision 2030 programme to reduce dependence on oil. The fund recently joined Silver Lake Management and Affinity Partners in acquiring Electronic Arts Inc in what would be the largest leveraged buyout on record, Bloomberg has reported.
The fund has also launched a commercial paper program in order to raise short-term debt and sold down stakes in portfolio companies to raise liquidity, while preparing to unveil a new long-term investment plan. The International Monetary Fund estimates the PIF will continue spending at least $40bn a year on domestic investments.
Tuesday’s offering adds to a surge in Saudi debt issuance this year. The government has already raised about $20bn in dollar- and euro-denominated bonds — among the most in emerging markets, according to data compiled by Bloomberg — amid weaker oil prices and a widening budget deficit.
Credit Agricole CIB, JPMorgan Chase & Co and Societe Generale were the joint global coordinators for the deal, with Barclays, BBVA, BNP Paribas, HSBC, IMI – Intesa Sanpaolo, and ING also acting as bookrunners.
The offering is split between €800mn of three-year notes and €850mn of seven-year notes, according to a person familiar with the matter.
The deal drew strong investor demand as the sovereign wealth fund continues to tap global markets to finance the kingdom’s economic transformation drive. Orders peaked at more than €8.7bn, with final books totalling over €6.9bn — including about €3.1bn for the three-year tranche and €3.8bn for the seven-year, the person said.
Final pricing tightened to 58 basis points over mid-swaps for the 2028 tranche and 90 basis points for the 2032 notes, after initial indications of 90–95 basis points and about 125 basis points, respectively. The deal is expected to be rated Aa3 by Moody’s and A+ by S&P.
The strong demand underscores investor appetite for Saudi debt, even as the Gulf nation increases issuance amid lower oil prices and elevated spending.
The sale follows a dollar bond issuance last month, as the PIF diversifies its funding sources to support investments under Crown Prince Mohammed bin Salman’s Vision 2030 programme to reduce dependence on oil. The fund recently joined Silver Lake Management and Affinity Partners in acquiring Electronic Arts Inc in what would be the largest leveraged buyout on record, Bloomberg has reported.
The fund has also launched a commercial paper program in order to raise short-term debt and sold down stakes in portfolio companies to raise liquidity, while preparing to unveil a new long-term investment plan. The International Monetary Fund estimates the PIF will continue spending at least $40bn a year on domestic investments.
Tuesday’s offering adds to a surge in Saudi debt issuance this year. The government has already raised about $20bn in dollar- and euro-denominated bonds — among the most in emerging markets, according to data compiled by Bloomberg — amid weaker oil prices and a widening budget deficit.
Credit Agricole CIB, JPMorgan Chase & Co and Societe Generale were the joint global coordinators for the deal, with Barclays, BBVA, BNP Paribas, HSBC, IMI – Intesa Sanpaolo, and ING also acting as bookrunners.
Source: GULF TIMES