Saudi Arabia’s PIF finalizes terms for $10 billion loan: Report

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Saudi Arabia’s Public Investment Fund (PIF) has reportedly finalized terms of a $10 billion loan that it’s looking to raise from a group of banks, Bloomberg said on Wednesday citing unnamed people familiar with the matter.

The Kingdom's sovereign wealth fund (SWF) has already received more than $20 billion of offers from banks, the people said.

The loan is set to provide the PIF with some liquidity ahead of its stake sale of Saudi Basic Industries Corp., one of the top three global chemical companies in the world.

The fund is planning to pay 30 basis points over the London Interbank Offered Rate for the bridge loan, the people told Bloomberg. Financing will have a one-year tenor with an option to extend another 12 months, they said.

When contacted by Al Arabiya English, the PIF said they are not ready to comment on the matter.

In April, when it first launched talks with lenders, the fund was seeking to raise as much as $8 billion. The PIF will pay off the loan with $70.1 billion it plans to receive from the sale of its 70 percent stake in SABIC to Saudi Aramco. Aramco plans to pay for half of the stake this year and the rest over the coming two years.

When PIF raised $11 billion from the banks in its first loan last year, it agreed to pay 75 basis points over Libor, although the deal has a tenor of five years, Bloomberg said in Wednesday's report.

The PIF is currently the world’s 11th largest sovereign wealth fund, according to the SWFI— Sovereign Wealth Fund Institute. It is also a cornerstone of the Vision 2030 economic overhaul, which aims to diversify the Kingdom’s investments, boost tourism, and reduce Saudi Arabia's reliance on oil revenues.

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