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Saudi's Public Investment Fund Takes $11 Bln in its First Loan

Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
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Saudi's Public Investment Fund Takes $11 Bln in its First Loan

Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser

Saudi Arabia's sovereign wealth fund says it has taken its first loan, a $11 billion borrowing from global banks as it tries to expand its investments.

The Saudi Public Investment Fund made the announcement in a statement on Monday.

“This is the first step in incorporating loans and debt instruments into PIF’s long-term funding strategy,” the fund’s managing director Yasir al-Rumayyan said in a statement. He added that the PIF would “develop into one of the most prominent users of banking services in the region”.

The PIF, which is to play a leading role in Saudi Arabia’s drive to develop non-oil industries, said it would use the loan for “general corporate purposes”.

Saudi Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense, has talked about using the PIF to help diversify the economy of the Kingdom, which relies heavily on money made from its oil sales.

The PIF program outlines Saudi objectives in local and international investments that enable the diversification of the Kingdom’s sources of development and growth.

The three-year program (2018 until 2020) includes around 30 initiatives which set a goal to increase PIF's asset portfolio to SAR1.5 trillion ($400 billion) by 2020.

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Trump Taps Scott Bessent for Treasury

(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)
(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)
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Trump Taps Scott Bessent for Treasury

(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)
(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)

President-elect Donald Trump on Friday said he will nominate prominent investor Scott Bessent as US Treasury secretary, a key cabinet position with vast influence over economic, regulatory and international affairs.

"I am most pleased to nominate Scott Bessent to serve as the 79th Secretary of the Treasury of the United States," Trump said in a statement released on Truth Social. "Scott is widely respected as one of the world's foremost international investors and geopolitical and economic strategists."

Wall Street has been closely watching who Trump will pick, especially given his plans to remake global trade through tariffs and extend and potentially expand the raft of tax cuts enacted during his first term, Reuters reported
The choice came after days of deliberations by Trump as he sorted through a shifting list of candidates. Bessent spent day after day at Trump's Mar-a-Lago home in Florida providing economic advice, sources said, a proximity to the president-elect that may have helped him prevail.
Other names that had been floated included Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh. Investor John Paulson had also been a leading candidate, but dropped out, while Wall Street veteran Howard Lutnick, another contender, was appointed as head of the Commerce Department.
Bessent, who did not immediately respond to a request for comment, has advocated for tax reform and deregulation, particularly to spur more bank lending and energy production, as noted in a recent opinion piece he wrote for The Wall Street Journal.
The market's surge after Trump's election victory, he wrote, signaled investor expectations of "higher growth, lower volatility and inflation, and a revitalized economy for all Americans."
"Bessent has been on the side of less aggressive tariffs," said Oxford Economics' Ryan Sweet, adding that picking him makes the steep tariffs Trump proposed on the campaign trail less likely.
Bessent follows other financial luminaries who have taken the job, including former Goldman Sachs executives Robert Rubin, Hank Paulson and Steven Mnuchin, Trump's first Treasury chief. Janet Yellen, the current secretary and first woman in the job, previously chaired the Federal Reserve and White House Council of Economic Advisers.
Republican US Senator Lindsey Graham from South Carolina, Bessent's home state, said in a statement: "President Trump's economic agenda is in good hands with Scott Bessent. I look forward to working closely with Scott and President Trump to lower inflation and create the golden age of prosperity for the American people."