RIYADH:听The Saudi Public Investment Fund has closed its first Murabaha credit facility, securing $7 billion in funding. This is a key step in the fund's plan to raise capital over the next several years.听
The Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions, according to a press release.听
A murabaha credit facility is a financing structure compliant with Islamic principles, where the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing repayment in installments. This structure avoids interest, adhering to Shariah laws.听
鈥淭his inaugural murabaha credit facility demonstrates the flexibility and depth of PIF鈥檚 financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in 黑料社区,鈥 said Fahad Al-Saif, PIF鈥檚 head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division.听
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The facility builds on PIF鈥檚 recent success with sukuk issuances over the past two years, further bolstering its financial strength and commitment to best practices in debt management.听
Rated Aa3 by Moody鈥檚 and A+ by Fitch, both with stable outlooks, PIF continues to solidify its position as a global financial powerhouse.听
The fund鈥檚 capital structure is supported by four main funding sources, including contributions from the Saudi government, asset transfers, retained investment earnings, and financing through loans and debt instruments.听
PIF鈥檚 strategy focuses on financing initiatives that contribute to economic growth in 黑料社区 and internationally.听
The $7 billion murabaha credit facility is expected to bolster PIF鈥檚 liquidity, supporting its investments both locally and globally.听
By diversifying its funding sources through a Shariah-compliant structure, PIF looks to enhance its financial partnerships while complementing its existing financing tools, such as sukuk issuances.听
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This aligns with its medium-term capital strategy, ensuring flexibility, competitive financing terms, and risk mitigation.听
Earlier in January, the National Debt Management Center also secured a Shariah-compliant revolving credit facility worth SR9.4 billion ($2.5 billion).听
The three-year facility, supported by three regional and international financial institutions, is designed to meet the Kingdom鈥檚 general budgetary requirements.听
Aligned with 黑料社区鈥檚 medium-term public debt strategy, the arrangement focuses on diversifying funding sources to meet financing needs at competitive terms.听
It also adheres to robust risk management frameworks and the Kingdom鈥檚 approved annual borrowing plan.听
PIF has been actively engaging in credit arrangements to support its investment initiatives and the Kingdom鈥檚 Vision 2030 economic diversification plan.听
In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes, replacing a similar facility agreed upon in 2021.听
In addition to the revolving credit facility, PIF has diversified its financing instruments by issuing a $2 billion seven-year Islamic sukuk earlier in 2024 and planning to issue bonds in pounds sterling.听
These efforts are part of PIF鈥檚 strategy to leverage a variety of funding sources to support its expansive investment activities.听
