Saudi Arabia’s PIF gets over $17.85bln in orders for green bonds

Saudi Arabia’s PIF gets over $17.85bln in orders for green bonds

DUBAI - Saudi Arabia's Public Investment Fund has received more than $17.85 billion in demand for its debut bond sale, a bank document showed on Wednesday, in what will be the first green bond deal by a sovereign wealth fund, expected to raise billions of dollars.

The sovereign wealth fund, along with several European issuers, took advantage of a rare window of relative calm amid heightened volatility that has engulfed markets for much of the year.

PIF will sell the green bonds in three tranches, including one with a tenor of 100 years, a first for a green bond and a sovereign wealth fund issuer.

Initial guidance was around 150 basis points over U.S. Treasuries for a five-year tranche, around 190 bps over UST for 10-year paper, and around 7%-7.25% for the 100-year bonds, which are expected to raise $500 million, the bank document showed.

The inclusion of the 100-year tranche was the result of investor enquiries, a source with knowledge of the deal said. Market watchers said the long maturity period showed the issuer's confidence.

"It is for brave hearts or fools," a fixed income analyst in the region said, referring to 100-year maturity bonds in general.

Bank documents showed the five-year and 10-year tranches