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Sources said the Saudi Public Investment Fund could raise $ 10 billion or more through a revolving loan, which is more than it originally aimed for as the sovereign wealth fund seeks additional liquidity to fund. what he plans.
The fund is the driving force behind Crown Prince Mohammed bin Salman’s economic transformation plans in Saudi Arabia and manages a $ 400 billion portfolio, and has increased its capacity through multiple funding sources in recent years.
The sources told Reuters that the fund, which declined to comment, was raising the new funding for general purposes.
The fund has been in talks with banks since last year to facilitate the third such financing since 2018, which was originally slated to amount to $ 7 billion.
One of the sources said the fund could raise between $ 13 billion and $ 15 billion from the one-year revolving loan, which the sources say banks can renew four times.
This will bring the total bank financing it has raised to date to over $ 30 billion, after two loans of $ 11 billion and $ 10 billion raised in recent years.
A revolving loan is a loan that can be withdrawn, repaid and withdrawn again during the agreed loan period.
One of the sources said that the one-year maturity period, renewable for four years, helps the fund secure low interest rates, but the risks for banks are that they end up valuing a transaction for four years as if she were. for a one-year facility, such as not renewing it This may affect their relationship with the borrower.
The fund adopts a two-pronged strategy of building a global investment portfolio while investing locally in projects that would help reduce Saudi Arabia’s dependence on oil.
The fund has received proceeds from Saudi Aramco’s IPO, which was worth $ 29.4 billion, and is expected to receive several installments of nearly $ 70 billion in payment in exchange for Aramco’s acquisition. of its stake in the petrochemical giant Saudi Basic Industries Corporation. (SABIC).
Last year, it also secured $ 40 billion in foreign exchange reserves for the Saudi Central Bank to support overseas acquisitions.
Prince Mohammed said the fund intends to inject at least 150 billion riyals ($ 40 billion) per year into the local economy until 2025, to support growth.
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