The Saudi Public Investment Fund (PIF) has successfully closed its first Murabaha credit facility, raising $7 billion in funding as part of its medium-term capital strategy.
This Shariah-compliant financing, backed by a syndicate of 20 international and regional financial institutions, marks a significant milestone in PIF’s efforts to diversify funding sources.
A Murabaha credit facility aligns with Islamic financing principles by avoiding interest. Instead, the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing for repayment in installments.
Fahad Al-Saif, Head of the Global Capital Finance Division at PIF, stated:
“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia.”
The facility builds on PIF’s recent success with sukuk issuances over the past two years, strengthening its financial resilience and adhering to best practices in debt management.
Financial Ratings and Strategy:
PIF, rated AAA by Moody’s and A+ by Fitch, both with stable outlooks, remains a global financial leader. Its capital structure is supported by four funding sources:
Contributions from the Saudi government.
Asset transfers.
Retained investment earnings.
Financing through loans and debt instruments.
The $7 billion raised will enhance PIF’s liquidity and support its ambitious local and global investments, aligning with Saudi Arabia’s Vision 2030 economic diversification plan.
Broader Context:
PIF has been actively engaging in financing initiatives:
In August 2024, it secured a $15 billion revolving credit facility for general corporate purposes.
Earlier in 2024, it issued a $2 billion seven-year sukuk, with plans to issue bonds in pounds sterling.
These efforts reflect PIF’s commitment to leveraging diverse funding sources and strengthening financial partnerships while pursuing competitive financing terms and risk mitigation.
Aligned with the Kingdom’s public debt strategy, these initiatives contribute to economic growth, both domestically and internationally.
