Riyadh – Mubasher: Saudi Public Investment Fund (PIF) has launched its commercial paper (CP) program, adding a new source of funding to its existing instruments, according to a press release.
The program allows CP issuance through offshore special-purpose vehicles (SPVs), as it covers two sub-programs, a U.S. CP program and a Euro CP program.
The program is rated ‘P-1’ by Moody’s and ‘F1+’ by Fitch, the highest possible ratings for such an initiative.
Fahad Al Saif, PIF’s Head of Global Capital Finance and Investment Strategy and Economic Insights, said: “The establishment of our CP program reflects the continued strength and depth of PIF’s capital raising strategy; one that is dynamic, resilient, and fit for purpose, aligning funding solutions with our long-term investment priorities.”
Moody’s also assigned the ‘P-1 rating’ to the fund’s inaugural backed US commercial paper program (USCP) as well as the inaugural backed Euro commercial paper program (ECP).
The USCP will be developed under the newly created SPV CPDE Investment Company, and the ECP will be established under the CPNL Investment Limited B.V.
PIF's ‘Aa3’ long-term issuer ratings, ‘Aaa.sa’ national scale rating (NSR) long-term issuer rating, and ‘aa3’ Baseline Credit Assessment (BCA) are unchanged. Meanwhile, the outlook on the SPVs is stable.
PIF has established a US commercial paper program aimed at offering commercial paper notes with maturities up to 397 days, while the European commercial paper program is intended to issue commercial paper notes with maturities up to 364 days.
The fund's sources of liquidity as of September 2024 consist of cash and cash equivalents of about SAR 106 billion ($28 billion) and undrawn SAR 56 billion ($15 billion) committed revolving credit facilities (RCF) maturing in 2027.
“We expect that PIF will effectively address its refinancing risk related to the 2029 maturity wall well before it arises, resulting in a more staggered maturity schedule,” the agency highlighted.
It added: “We expect that total issuances under these programs will be sufficiently backstopped by PIF's existing $15 billion committed RCF (including a $3.30 billion swingline facility) and that total amounts outstanding at any three consecutive days shall not exceed $3.30 billion.”
PIF’s Aa3 issuer rating aligns with the sovereign rating of the Saudi government (Aa3 stable) and reflects its standalone creditworthiness expressed by a Baseline Credit Assessment (BCA) of ‘aa3’.
Accordingly, the fund’s rating could be downgraded if the sovereign rating is downgraded.
PIF recently created Expo 2030 Riyadh Company (ERC), with the aim of building and operating the facilities of Saudi Arabia’s first World Expo.
