The PIF closes a syndicated loan worth up to USD 5 bn

The PIF secures a USD 3 bn syndicated loan: The Public Investment Fund (PIF) — the Kingdom’s sovereign wealth fund — has lined up a facility from a syndicate of nine international banks to finance its imports from South Korea for projects that are partially or fully run by the fund, according to a joint statement yesterday. Information about the specific type of exports and projects the agreement is targeting as well the advisors on the transaction wasn’t made public, nor were the names of the participating banks.

The details: The lenders will initially disperse USD 3 bn, while the loan size can increase to USD 5 bn, according to the agreement. This carries a door-to-door 13-year tenor and it is guaranteed by the Korea Trade Insurance Corporation (K-Sure), South Korea’s export credit agency. It’s the first time the PIF has taken on board cash from an export credit agency.

It’s just the latest addition of debt to PIF’s war chest: The fund recently closed a USD 3.5 bn global sukuk issuance, two green bond offerings totaling USD 8.5 bn, and lined up a USD 17 bn corporate facility last year.

REMEMBER- The fund aims to invest a whopping USD 40 bn every year local economy as part of our drive to diversify away from oil.

This could mean more business for Korean exporters: “Through this financial support, Korean companies have not only gained technological competitiveness but also financial competitiveness to increase orders,” said K-Sure President Inho Lee.

The story got ink in Bloomberg and Reuters.

BACKGROUND- PIF has been exploring Korea for a while now, having signed a JVagreement last month with automotive giant Hyundai Motor Company to build a USD 500 mn highly-automated vehicle assembly plant in the kingdom. The PIF will have a 70% stake in the venture while Huyndai will hold the remaining 30% while also providing technical and commercial expertise.

When will it open? Construction at the plant, which will have a capacity as many as 50k vehicles per year, is expected to start next year. Production of both EVs and fossil-fuel-fired cars at the plant should start in 2026.

ALSO: INVESTING IN PRIVATE CREDIT

PIF’s Jada announces first investment in private credit: Jada Fund of Funds Company, which is owned by the PIF, announced its first investment in private credit with an unspecified contribution to Ruya Partners’ USD 250 mn fund, it said in a statement yesterday. The announcement comes a few months after Jada said it expanded its investment coverage to include private credit.

Already halfway through: Jada’s investment marks the Ruya’s fund first close, reaching half of the target fund size, according to the statement. It is expected to reach final close by Q1 2024, it added.