PIF sells USD 1.25 bn in 7-year USD-denominated sukuk

The Kingdom is once again tapping into the debt markets: The Public Investment Fund (PIF) sold USD 1.25 bn in 7-year USD-denominated sukuk, Bloomberg reported, citing sources it said are familiar with the matter. The issuance raked in more than USD 8.2 bn in orders, sources said.

The yield: The issuance was priced at 110 basis points above US treasury bonds, tightened by 35 points from the initial price guidance.

We knew this was coming: The PIF was earlier reported to be planning a USD 1.5-2 bn sukuk issuance within weeks, as the Kingdom looks to fill budget gaps caused by falling oil prices. The PIF raised some USD 11 bn so far this year.

ICYMI- The sovereign wealth fund last tapped the debt markets back in January, raising USD 4 bn from a two-tranche issuance that was nearly 4x oversubscribed, with an order book of approximately USD 16 bn. The issuance came as part of the PIF’s EUR Medium-Term Note Program, with the proceeds set to be “utilized for general corporate purposes. the fund said at the time. PIF also completed a USD 7 bn murabaha credit facility earlier in January as part of its “medium-term capital raising strategy.”

The Kingdom is expected to borrow quite heavily this year: The wider budget deficit will likely entail more public borrowing from Saudi Arabia and the country has already been the largest emerging market issuer of debt so far this year, just as it was in 2024,” Emirates NBD wrote in a note this week.

As of March 2025, Saudi Arabia’s total direct debt reached SAR 1.33 tn (USD 354.3 bn) — SAR 797.1 bn (USD 231.6 bn) in domestic debt and SAR 531.7 bn (USD 141.8 bn) in external debt. This marks a 9.3% increase from the previous year, highlighting the ongoing expansion of the Kingdom's debt portfolio.