Morgan Stanley aims to reduce financial exposure to Saudi Arabia’s Public Investment Fund

by time.news archyves

Morgan Stanley is trying to get rid of a US$350 million loan it made to Saudi Arabia’s Public Investment Fund (PIF).

The Saudi Arabian Public Investment Fund operates as an investment company. The Company focuses on investments in healthcare, technology, real estate, infrastructure, consumer services, transportation and other strategic sectors. PIF serves clients around the world.

According to Bloomberg, the Wall Street bank is sounding interest from potential buyers for debt issued to Saudi Arabia’s Public Investment Fund, according to a note detailing several loan sales seen by Bloomberg News.

It is not disclosed what price he would be willing to accept or the reason for the sale. Morgan Stanley has recently been eliminating some of its corporate loan exposures, reflecting a trend among banks to reduce capital-intensive assets as interest rates have risen.

The sale is linked to a loan the PIF raised through 25 banks, including Morgan Stanley in 2022, which broke the record for the largest investment for general corporate purposes with a Middle Eastern borrower. Banks typically need the borrower’s consent to sell the debt.

The debt issuance refinanced an $11 billion loan and increased the PIF loan to $17 billion due in November 2029.

The PIF has become a global investor over the past few years and aims to increase its assets from $700 billion to around $1 trillion by 2025 to help the Saudi economy diversify away from oil. The fund is financed through a combination of loans, transfers of money and government assets, and retained earnings from its investments.

Recently, Saudi Arabia’s tax revenues have been under pressure due to falling oil prices, which could make the Public Investment Fund less attractive to potential investors.

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