Saudi wealth fund is said to repay $10bn bridge loan

Saudi Arabia’s sovereign wealth fund has paid back a $10bn bridge loan two months ahead of schedule, according to people familiar with the matter.

The Public Investment Fund (PIF) has fully repaid the loan, which was due in October, the people said, asking not to be identified because the information is private.

It had signed the loan last year to raise funds while it waited for the proceeds of the sale of its nearly $70bn stake in Saudi Basic Industries Corp., which closed in June.

Saudi Arabia has been pushed into a deep budget deficit by the coronavirus pandemic and oil-price slump, forcing the kingdom to hike taxes and increase the government debt ceiling to 50 per cent of economic output.

The PIF is a key part of a plan by Crown Prince Mohammed bin Salman to transform the economy and wean it off a reliance on petroleum revenues.

A group of 10 banks provided the loan: Bank of America Corp., BNP Paribas SA, Citigroup, Credit Agricole SA, HSBC Holdings, JPMorgan Chase & Co., Mizuho Financial Group, Mitsubishi UFJ Financial Group Inc, Standard Chartered and Sumitomo Mitsui Banking Corp.

A spokesman for the PIF confirmed it had been repaid ahead of schedule, without providing further details.

Saudi Arabia’s Maaal news site reported the payment earlier, citing unidentified people.

PIF, under the leadership of Yasir Al-Rumayyan, has shifted its focus from being mostly a domestic holding company to an international investment vehicle with stakes in Citigroup, Facebook and Boeing Co.

It’s also an anchor investor in domestic projects like the $500bn futuristic city of Neom being developed on the kingdom’s northwestern coast.