Saudi sukuk issuances increased by 37 percent during the past year on an annual basis, according to S&P Global Ratings.
The announcement was made as the global credit rating agency, Moody’s, assigned the Public Investment Fund (PIF) with a first-time issuer rating of A1 and a scorecard indicated rating of Aa2, with a stable outlook.
The volume of Saudi government and national companies’ issuances amounted to $36.9 billion in 2021, compared to $27 billion in 2020, and $28.6 billion in 2019, said S&P.
Large issuances in Saudi Arabia, such as Saudi Aramco’s sukuk, for example, contributed to this increase, the agency said.
In parallel, the PIF received international credit ratings from Moody’s and Fitch for the first time, underlining the creditworthiness of the Fund and the quality of its investment portfolio in line with its growth targets.
The new ratings represent a milestone achieved following the reforms introduced in 2015 under the leadership of Crown Prince Mohammad bin Salman, following the reconstitution of the PIF’s management and the transfer of the oversight to the Council of Economic and Development Affairs (CEDA), which led to the launch of the Fund’s strategy and transformed it into one of the enablers of Vision 2030.
In this regard, Governor of PIF Yasir Al-Rumayyan said: “Under the leadership of Crown Prince Muhammad bin Salman, achieving a credit rating is an important step as we continue to grow our investment portfolio and achieve our objectives, having paved the way through PIF’s Strategy 2018-2020 and 2021-2025.”
He continued: “Our rating is a significant achievement and a reflection of several factors, including our world-class governance, strong financial profile, and the diversity of our business and portfolio… This result will further enhance our access to international capital markets and continue to diversify our sources of funding which is in line with PIF’s strategy.”
The Moody’s report indicated that the PIF received the highest level of Aaa rating in five sub-categories: Business Diversity, Financial Policy, Debt Coverage, Leverage and Liquidity.
Moody’s highlighted the fund’s growth and its ability to double its assets, which amounted to more than 1.54 trillion riyals ($410 billion) in December 2020, compared to 570 billion riyals ($152 billion) in 2015.
The Moody’s rating confirmed PIF’s strong governance principles and its commitment to maintain a strong credit profile at the subsidiary level by being represented on the board and involved in determining the financial policies of these entities.
The report focused on the diversification of the Fund’s investments, by launching priority sectors at the local and international levels, as well as its strong financial position, with low leverage, very high interest coverage, and an excellent liquidity profile.
