Saudi Arabia’s Public Investment Fund (PIF) is set to choose international banks to lend the wealth fund $11 billion, according to a report in the London-based Financial Times.
The FT reports that there is strong interest from major international lenders in participating in the loan to the PIF, including “[s]ome of the most senior names in international banking, including JPMorgan’s Jamie Dimon, Morgan Stanley’s Franck Petitgas and Goldman Sachs’s Dina Powell, the former Trump White House official” actively pitching for the deal.
The reported $11 billion loan is higher than the original $8 billion the PIF had hoped to raise. One person close to the deal told the FT the loan was oversubscribed and likely to be set at $11bn with a spread of 75 basis points over Libor, commonly used as a floating rate benchmark.
The PIF has also made substantial commitments to technology companies or investments, including a $45 billion agreement to invest in a giant tech fund led by Japan’s Softbank, a tentatively committed $20 billion to Blackstone, and other investments to help diversify the Kingdom’s economy.
The FT also notes that eager bankers are keen to get a foot into the door with the PIF because the state fund is also planning to sell a $70 billion stake in Sabic, the Saudi chemicals group, to Saudi Aramco, in one of this year’s largest deals. “The sale, which moves money from one state coffer to another, will have implications for league table rankings that banks use to measure their performance against rivals.”