PARIS, France - Saudi Arabia's Public Investment Fund has begun taking orders for its debut bond sale, a bank document showed on Wednesday, in what will be the first green issuance by a sovereign wealth fund, which is expected to raise billions of dollars.
PIF gave initial price guidance for the green bonds at around 150 basis points over U.S. Treasuries for a five-year tranche, around 190 bps over UST for 10-year paper, and around 7% - 7.25% for a 100-year portion expected to raise $500 million, the bank document showed.
The five-year and 10-year tranches are expected to be of benchmark size, which typically means at least $500 million. Books have opened and the deal is expected to close later on Wednesday, the document showed.
Sources have previously said the deal is expected to raise billions of dollars.
The fund, which manages more than $600 billion in assets, is at the center of Saudi Arabia's ambitious agenda to diversify the economy away from oil, spearheaded by Saudi Crown Prince Mohammed bin Salman.
The crown prince, Saudi Arabia's de facto ruler, said in December that PIF would invest about $40 billion domestically in 2022 after spending roughly $33 billion last year.
The fund, which aims to grow its assets to more than $1 trillion by 2025, expects to invest more than $10 billion by 2026 in eligible green projects, including renewable energy, clean transport, and sustainable water management, an investor presentation for the bonds showed.
BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, and JPMorgan are joint global coordinators and active book-runners on the deal. Eight other banks are also active bookrunners and 11 more are also on the deal.
