Saudi’s PIF launches commercial paper programme to diversify funding sources

Saudi Arabia’s Public Investment Fund (PIF) has established a commercial paper (CP) programme, introducing a new short-term financing tool to complement its existing funding instruments.

According to a statement from the sovereign wealth fund, the new program consists of two sub-programmes: a US commercial paper programme and a Euro commercial paper programe, issued through offshore special purpose vehicles.

It has secured the highest possible ratings for commercial paper initiatives — P-1 from Moody’s and F1+ from Fitch.

The CP programme is designed to enhance PIF’s short-term liquidity and cash management flexibility, supporting its dynamic approach to capital raising. “The establishment of our CP programme 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,” said Fahad Al-Saif, head of PIF’s Global Capital Finance and Investment Strategy and Economic Insights.

Programme part of PIF’s mid-term strategy

The launch marks the latest step in PIF’s medium-term capital-raising strategy, which includes a diversified mix of bonds, sukuk and loans.

In October 2022, the fund became the first sovereign wealth fund globally to issue a green bond, which included the world’s first century green bond. That milestone was followed by its inaugural sukuk issuance, raising $3.5bn.

PIF holds a long-term issuer rating of Aa3 with a stable outlook from Moody’s, and an A+ rating, also with a stable outlook, from Fitch.

Recognised as one of the world’s most influential institutional investors, PIF plays a central role in enabling the creation of new sectors and economic opportunities globally while driving the transformation of Saudi Arabia’s economy, the fund said in the statement.

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