Saudi Arabia’s Public Investment Fund (PIF) has been assigned debut ratings by agencies Fitch and Moody’s, receiving an ‘A’ rating and ‘A1’ rating, respectively.
“Fitch classifies PIF as a government-related entity (GRE) under its Government-Related Entities Criteria. PIF as a traditional sovereign wealth fund is legally entrusted to act as the leading strategic investment arm of Saudi Arabia to promote the diversification and development of Saudi Arabia’s non -oil sector under the government’s ‘Vision 2030’ strategic agenda. PIF’s strategic objectives are closely aligned with national economic objectives. The fund’s total assets at end-2021 were 57% of national GDP,” Fitch Ratings said.
PIF is the sovereign wealth fund of the Kingdom of Saudi Arabia, and wholly owned by the Saudi government, established under a Royal Decree in 1971, Fitch notes. “As per its special legal status, PIF is exempted from a bankruptcy regime and only the state can resolve financial distress of the GRE, notably through dissolution in a Royal Decree. Fitch expects that in this instance, the fund’s assets and liabilities would be transferred to the sovereign.”
“It is Fitch’s view that the government has an oversight over PIF, notably over its investment and funding strategies through its Board of Directors, which is chaired by the Crown Prince and governed by appointed Ministries and government officials. Since 2015 PIF is organised under Council of Economic and Development Affairs of Saudi Arabia (CEDA) chaired by the Crown Prince, which is the supervisory body over PIF’s operations. As the key policy -driven economic agent of Saudi Arabia, Fitch does not expect changes to PIF’s status, ownership and control over the medium term.”
Moody’s gave an A1 long-term rating baseline credit assessment.
The PIF is looking to extend credit facilities and raise public debt to fund its ambitious spending and investment commitments at home and abroad, according to the Financial Times.
