The International Development Association (IDA, rated Aaa/P-1 and AAA/A-1+ by Moody’s and S&P) launched the first ‘t-bills’ under a new program for investors looking to support the financing of IDA’s development activities in 75 countries with the lowest per capita incomes. The bills raised more than US$200 million from institutional investors in Asia. This expands IDA’s borrowing program to money market investors after its inaugural 5-year benchmark bond last year.
The IDA Bills Program initially targets up to US$2 billion equivalent outstanding. IDA Bills will be issued with a maximum maturity of 364 days and in a variety of currencies. Citibank is the arranger for the program, and Barclays, Bank of America Merrill Lynch, Citibank and NatWest Markets are its appointed dealers.
Kristalina Georgieva, Interim President of the World Bank Group and Chief Executive Officer of the World Bank, said: “After the strong and positive response to IDA’s inaugural bond last year, we are pleased to see similar levels of support for the new IDA Bills Program. We will continue to develop products for investors around the world who want to support IDA’s life-changing work and make a difference to the lives of hundreds of millions of people.”
As a new issuer, IDA is gradually introducing new offerings to meet a range of investor needs. Funding raised from the market will complement continued shareholder support to enable IDA to significantly expand its life-changing investments. IDA provides technical expertise and low-cost financing for projects and programs that boost economic growth and reduce poverty in the world’s poorest countries—from tackling conflict, fragility and violence; forced displacement; climate change; and gender inequality to promoting governance, institution building, creating jobs and supporting private sector for economic transformation.
IDA’s borrowing program is managed by the World Bank Treasury. IDA was established in 1960 and entered the capital markets for the first time in April 2018 with an inaugural US$1.5 billion benchmark bond. IDA’s decision to access capital market financing leverages its strong financial position—including an unparalleled equity base, a strong track record of loan repayment, and shareholder commitment to regular capital injections.
IDA’s balance sheet is denominated in Special Drawing Rights, or SDR, an international reserve asset based on a based on a basket of five currencies—the British pound, Chinese renminbi, euro, Japanese yen and the U.S. dollar. IDA’s borrowing program will, over time, reflect its funding needs in all five currencies.
