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RIYADH: ����ֱ��’s Public Investment Fund has commenced the sale of US dollar-denominated sukuk with priority payment for a seven-year term, as reported by Reuters. 

According to a banking document viewed by the agency, the initial indicative price for the bond sale has been set at a premium of around 115 basis points above US Treasury bonds. 

The Kingdom’s sovereign wealth fund, managing assets exceeding $700 billion, has appointed Goldman Sachs, HSBC, and Standard Chartered to arrange meetings with potential investors. 

PIF, along with the government of ����ֱ��, last month joined a wave of emerging market issuers seeking to take advantage of rising demand for debt before central banks are expected to lower interest rates later this year.  

A sukuk is a financial offering that complies with Islamic religious rules regarding interest. PIF accounted for about a quarter of the $124 billion spent by sovereign wealth funds worldwide last year, according to a report in January from industry specialist Global SWF.  

The fund plans to ramp up its deployment of capital to $70 billion a year after 2025, from $40 billion to $50 billion currently, PIF Gov. Yasir Al-Rumayyan said last week in Miami. 

It raised $5 billion through the sale of a triple-tranche conventional bond in January and $3.5 billion from a sukuk deal in October 2023.  

Last month’s $5 billion bond issuance successfully concluded pricing, drawing demand that propelled order books to reach $27 billion, marking an oversubscription of more than five times, as stated in an official announcement. 

It comprised three tranches — one valued at $1.75 billion with a five-year coupon maturing in 2029, another for the same amount with a 10-year coupon, and the final valued at $1.5 billion over a 30-year period. 

Fahad Al-Saif, head of PIF’s global capital finance division, said: “Continued strong demand from international institutional investors is testament to the ongoing success of PIF’s medium-term capital raising strategy.” 

Loans and debt instruments represent one of PIF’s four sources of funding. The wealth fund is rated A1 by Moody’s with a positive outlook and A+ by Fitch with a stable outlook.