Saudi Arabia's sovereign wealth fund raised $3 billion with its debut bond sale in U.S. dollars that also marked its first foray into ethical finance.
The Public Investment Fund sold the debt in three tranches, including a world-first dollar century green bond.
PIF, as the fund is known, joins a host of oil-rich nations in raising green debt as they diversify sources of long-term funding and reinforce commitments to environmentally friendly projects. But none has attempted a century-long dollar green debt, let alone in a debut sale. PIF issued $500 million from the 100-year notes.
"Notwithstanding the recent increase in rates, they remain low by historical levels. Locking in term funding by selling century bonds will help PIF efficiently finance their multidecade economic vision," said Doug Bitcon, the Dubai-based head of credit strategies at Rasmala Investment Bank. "Downside is that this paper will not have a natural regional bid and is likely to be quite volatile in times of market stress."
The bond comes as Saudi Arabia — one of the world's largest oil exporters — seeks to diversify away from crude sales. The kingdom pledged to neutralize greenhouse gas emissions within its borders by 2060, and has earmarked billions for carbon-capture technology as part of that goal.
The debt offering comes just as OPEC+ agreed to make a large production cut to keep oil prices high on Wednesday, drawing an immediate rebuke from the U.S. The move was defended by ministers from the producers' group as necessary to protect the oil industry and their own economies from the risk of a global slowdown.
