Saudi Arabia's sovereign wealth fund raises $11bn loan

Loan was larger than initially planned due to strong interest from banks

The sovereign fund is carrying out a plan to end Saidi Arabia's dependence on oil under Crown Prince Mohammed bin Salman Al Saud (Getty)

Saudi Arabia’s sovereign wealth fund has raised an $11bn (£8.4bn) loan, marking its first-ever borrowing.

The loan was larger than initially planned due to strong interest from banks and establishes a core banking group for the Public Investment Fund (PIF) to work with on future deals, the fund said in a statement.

“This is the first step in incorporating loans and debt instruments into PIF’s long-term funding strategy,” said Yasir Al-Rumayyan, managing director of the PIF.

Some of the biggest global lenders including Goldman Sachs, HSBC and JPMorgan provided the loan that’s priced at 75 basis points over Libor, or just shy of 90 basis points including fees, people familiar said last week.

The fund, which has investments in Uber and Tesla, hired former Bank of America Merrill Lynch managing director Alireza Zaimi as head of corporate finance and treasury last year to work on its borrowing plans. It’s also in talks to sell its stake in chemical producer Saudi Basic Industries to oil giant Saudi Aramco, which could raise as much as $70bn.

Bloomberg