Saudi PIF starts selling debut green bonds

Saudi PIF starts selling debut green bonds

Saudi Arabia’s Public Investment Fund has begun taking orders for its debut bond sale, a bank document showed on Wednesday, in what will be the first green issuance by a sovereign wealth fund, which is expected to raise billions of dollars.

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PIF gave initial price guidance for the green bonds at around 150 basis points over US Treasuries for a five-year tranche, around 190 bps over UST for 10-year paper, and around 7 percent-7.25 percent for a 100-year portion expected to raise $500 million, the bank document showed.

The five-year and 10-year tranches are expected to be of benchmark size, which typically means at least $500 million. Books have opened and the deal is expected to close later on Wednesday, the document showed.

Sources have previously said the deal is expected to raise billions of dollars.

The fund, which manages more than $600 billion in assets, is at the center of Saudi Arabia’s ambitious agenda to diversify the economy away from oil, spearheaded by Saudi Crown Prince Mohammed bin Salman.

The crown prince, Saudi Arabia’s de facto ruler, said in December PIF would invest about $40 billion domestically in 2022 after spending