Introduction 2 - Saudi sovereign wealth fund sets spreads for 3-tranche dollar bonds after demand exceeds
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May 7 (Reuters) - Saudi Arabia's Public Investment Fund (PIF) has set profit margins for a benchmark three-tranche dollar bond issue , after total demand exceeded $21.6 billion , the IFR fixed-income news service reported on Thursday, marking the sovereign wealth fund's return to debt markets to help finance the kingdom's economic diversification efforts.
She said the fund reduced the pricing spread for the three- year tranche to 95 basis points above US Treasury bonds , after the initial guidance price was around 130 basis points. It also reduced the spread for seven-year bonds to 105 basis points from 135 basis points and for 30- year bonds to 135 basis points from 170 basis points .
She added that the volume of orders exceeded $7.6 billion for three-year bonds, more than $6.8 billion for seven-year bonds, and more than $7.2 billion for 30-year bonds.
Citi, Goldman Sachs International, HSBC and JPMorgan are serving as joint global coordinators.
The Public Investment Fund most recently tapped the debt markets in January, when it raised $2 billion from the sale of 10-year Islamic bonds.
The fund, which manages assets approaching $1 trillion, is a key pillar of the kingdom’s Vision 2030 program to diversify the economy away from oil, which requires investments of hundreds of billions of dollars.
The planned sale comes at a time when Saudi Arabia and its related entities continue to raise debt amid large spending requirements and regional turmoil.
Saudi Arabia recorded a budget deficit of 125.7 billion riyals, equivalent to $33.5 billion, for the first quarter, as it increased spending to support the economy amid the turmoil caused by the Iran war.
The Kingdom’s National Debt Management Center said this week that it had completed its annual borrowing plan for 2026, having secured about 90 percent of its financing needs before the latest geopolitical developments in the region.
The plan projected financing needs of approximately 217 billion riyals, equivalent to $57.86 billion, including the expected deficit and debt repayment.