Saudi Wealth Fund Mandates Banks for Debut Dollar Green Bond




  • In Business
  • 2022-09-27 14:31:18Z
  • By Bloomberg
 

(Bloomberg) -- Saudi Arabia's sovereign wealth fund has mandated banks for a dollar green bond sale, according to people with knowledge of the matter, as the kingdom seeks to reshape its reputation on environmental issues.

Most Read from Bloomberg

  • Germany Suspects Sabotage Hit Russia's Nord Stream Pipelines

  • Everything-Selloff on Wall Street Deepens on 98% Recession Odds

  • Stocks, Commodities Drop; US Treasury Yields Surge: Markets Wrap

  • John Paulson on Frothy US Housing Market: This Time Is Different

  • Hurricane Ian Makes Landfall in Cuba as It Churns Toward Florida

The PIF, as the fund is known, is working with lenders BNP Paribas SA, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the debut multi-tranche ethical sale, the same people said. Investor calls for the offering start on Tuesday.

The sale comes as Saudi Arabia -- one of the world's largest oil exporters -- seeks to transform its image as a laggard on efforts to tackle climate change. The kingdom announced plans to reach net zero emissions by 2060, a decade later than many large economies, and is investing heavily in renewable energy and developing hydrogen as a cleaner energy source.

The PIF is a major backer of many of the country's green ambitions and will use proceeds from the bond sale to finance, refinance or invest in one or more green projects like renewable energy, according to the bond prospectus that was seen by Bloomberg. The sale will add to the almost $3 trillion of outstanding ESG bonds globally, according to data compiled by Bloomberg. The fund, whose assets also include stakes in oil giant Saudi Aramco and Saudi Arabian Mining Co., was also working with BlackRock Inc. on developing an ESG framework.

$10 Billion Investment

The PIF has been mandated to develop 70% of the kingdom's renewable energy program and expects to make more than $10 billion of investment in green projects by 2026, according to the prospectus.

Still, even as it promises to tackle emissions, the kingdom is embarking on a plan to boost production capacity of commodities including oil, gas and minerals.

While the fund has "indirect" exposure to environmental and social risks, its "portfolio is quite diversified and many of the sectors where PIF invests have low exposure to environmental and social risks," Moody's said in February.

Alongside the global coordinating banks, the fund will also work with Credit Agricole SA, First Abu Dhabi Bank PJSC, HSBC Holdings Plc, Mizuho Financial Group Inc, SMBC Nikko, SNB Capital, Societe Generale SA and Standard Chartered Plc, which have been mandated as joint active bookrunners.

PIF is rated A1 by Moody's Investors Service and A by Fitch, the sixth-highest investment-grade level -- also the same grade it assigns for Saudi Arabia's government.

(Updates with details of global ESG market in fourth paragraph, adds bank in eighth par)

Most Read from Bloomberg Businessweek

  • The Supreme Court Is About to Display Its Power Imbalance Again

  • Mental Health Crisis Leads Hospitals to Create a New Type of ER

  • The Sneaky Genius of Apple's AirPods Empire

  • US Is Inflating Its Debt Away After Unprecedented Spending Binge

  • To Find Success at Work, Match Your Job With Your Personality

©2022 Bloomberg L.P.

COMMENTS

More Related News

Wall Street Rips Up Dollar Playbook as 2022
Wall Street Rips Up Dollar Playbook as 2022's Top Bet Crumbles

(Bloomberg) -- The dollar looked unstoppable earlier this year when investors were adding to bets on inflation and US rate hikes. Now they're turning against...

Asia Currencies Set for Best Month in Six Years on Fed Rate Bets
Asia Currencies Set for Best Month in Six Years on Fed Rate Bets

(Bloomberg) -- Asian currencies are set for their steepest monthly advance in more than six years, with the approaching end of the Federal Reserve's...

Eisai, Biogen Plunge After Report of Second Death in Groundbreaking Alzheimer
Eisai, Biogen Plunge After Report of Second Death in Groundbreaking Alzheimer's Drug Trial

(Bloomberg) -- Eisai Co shares fell the most in about 16 months following a report of a second death potentially linked to the groundbreaking experimental...

China
China's Covid-Hit Economy Leaves Door Open for PBOC Easing

(Bloomberg) -- China's worsening economic slump and a likely disruptive rollback of Covid restrictions will keep the central bank on its easing path...

Biden Set to Urge Congress to Intervene in Freight Rail Fight
Biden Set to Urge Congress to Intervene in Freight Rail Fight

(Bloomberg) -- President Joe Biden and Speaker Nancy Pelosi are moving to prevent a looming shutdown of the nation's freight railroads with the House...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business