Saudi Arabia’s Public Investment Fund (PIF) and Korea Trade Insurance Corporation (K-SURE) signed on Nov. 28 a financing agreement through which PIF has secured a term loan, from a syndicate of nine top international lenders.
The financing carries a door-to-door tenor of 13 years and will initially be set at $3 billion (nearly SAR 11.2 billion), with an option to increase to $5 billion (nearly SAR 18.7 billion), subject to pre-agreed terms and conditions.
The transaction will mark PIF’s first financing covered by an export credit agency, as it continues to diversify its sources of funding.
In March 2022, PIF and K-SURE signed a memorandum of understanding (MoU) expressing mutual intention to strengthen their partnership and cooperation. This resulted in achieving, among other matters, the K-SURE covered term loan.
The collaboration between PIF and K-SURE aims to promote the export of Korean goods and services into various projects and subsidiaries either partially or fully owned by PIF while strengthening economic partnerships.
“This collaboration with K-SURE underscores PIF's commitment to foster institutional partnerships as we continue to deliver on our medium-term capital raising strategy,” said Fahad AlSaif, Head of the Global Capital Finance Division at PIF.
“The financing is part of PIF’s four primary sources of funding and strengthens economic ties between Saudi Arabian and South Korean businesses,” he added.
“Through this financial support, Korean companies have not only gained technological competitiveness but also financial competitiveness to increase orders,” said Inho Lee, President of K-SURE.
“We trust this support will contribute to strengthening the future-focused partnership between the two countries,” he added.
This financial agreement marks a continuation of PIF’s efforts to diversify its funding sources.
Recently, it successfully issued international bonds totaling $3.5 billion.