Saudi Arabia's Public Investment Fund (PIF), the country's sovereign wealth fund, launched a $5 billion bond on Monday, capital markets publication IFR reported.

The PIF, which had around $718 billion in assets under management as of Sept. 30, joins a wave of emerging market issuers that have tapped the debt market this year.

The triple-tranche bond sale generated strong demand, with orders worth over $27 billion, IFR said.

Final spreads narrowed from the initial guidance to reach 115 basis points (bps) over U.S. Treasuries for the 5-year bonds from an initial 150 bps, 145 bps over U.S. Treasuries for the 10-year bonds from an initial 175 bps, and 205 bps for the 30-year portion from 235 bps, according to IFR.

Citi, Goldman Sachs International and J.P. Morgan were joint global coordinators for the bond offering, according to the documents.

PIF is the chosen vehicle of Saudi Crown Prince Mohammed bin Salman, Saudi Arabia's de facto ruler, to drive the country's ambitious plan to wean itself off oil and diversify its economy.

The fund has raised tens of billions to fund a programme to create new industries and jobs by expanding both at home and abroad with a slew of investments and joint ventures as well as tapping the debt market.

Saudi Arabia, the world's top oil exporter, earlier this month sold a $12 billion, three-part bond issue, and PIF last October completed the issuance of Islamic bonds worth $3.5 billion. Both issues generated strong demand.

Debt issuance from emerging markets has made a roaring start in 2024 with bond sales in the first half of January topping $30 billion.

Debt sales have been skewed towards higher-rated sovereigns, with Mexico launching its biggest ever sale at $7.5 billion in early January and Poland, Hungary and Indonesia all active in the market.

Apart from Saudi Arabia, at least five other countries are each expected to issue at least $10 billion, namely Indonesia, Poland, Turkey, Israel and Mexico, with the latter potentially reaching $18 billion.

Analysts at Morgan Stanley estimate that developing countries will issue nearly $165 billion this year - a roughly 20%, or $30 billion, increase on 2023.

($1 = 3.7505 riyals)

(Additional reporting by Shamsuddin Mohd and Karin Strohecker, editing by Jason Neely, Ed Osmond, Emelia Sithole-Matarise and Christina Fincher)