LIBOR-Equivalent of Lending Rates

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IBRD Lending Rates and Loan Charges

Lending Rates for the IBRD Flexible Loan (IFL)
as of July 1, 2008

CURRENCY	Variable Spread Option	Fixed Spread Option
USD	LIBOR - 2	LIBOR + 5
EUR	LIBOR - 2	LIBOR + 7
JPY	LIBOR - 2	LIBOR + 7

IBRD Loan Charges²

IBRD Loans Whose Invitation to Negotiate Is:

IBRD loans signed on or after May 16, 2007(2)

Prior to July 31, 1998

On or After July 31, 1998 and signed before May 16, 2007

Front-end Fee
None

1.00% of loan amount

0.25% of loan amount

Contractual Spread
0.50%

0.75%

0.30%

Fixed Spread Risk Premium
-

0.05%

0.05%

Commitment Fee

0.75% on undisbursed amounts

0.75% on undisbursed amounts

---

FY08 Interest Waiver
0.05% for borrowers paying on a timely basis

0.25% for borrowers paying on a timely basis

---

FY08 Commitment Fee Waiver
0.50% waived unconditionally on a yearly basis to all borrowers

0.50% waived unconditionally on a yearly basis to all borrowers

---

FY08 Front-end Fee Waiver
N/A

1.00% waived unconditionally on a yearly basis to all borrowers

---

2 These charges are for standard Bank loans. Special Development Policy Loans (SDPLs) have different financial terms, including higher loan charges.

Front-end Fee Policy on IBRD Loans

For all IBRD loan commitments whose invitation to negotiate is issued on or after July 31, 1998, and signed prior to September 27, 2007, a front-end fee of 100 basis points will be charged, payable on the loan’s Effective Date. A front-end fee of 25 basis points will be charged on IBRD loan commitments signed on or after September 27, 2007.
In the event of loan cancellation, adjustments to the front-end fee will be handled as follows:

If the loan is fully cancelled prior to the loan’s Effective Date, no front-end fee will be charged.
If the loan is partially cancelled prior to its Effective Date, the amount of the front-end fee payable will be reduced on a pro rata basis and the adjusted front-end fee will be payable to the Bank upon the loan’s Effective Date.
If the loan is partially or fully cancelled on or after the loan’s Effective Date, no adjustment to the front-end fee will be made. This will apply equally to loans comprised of tranches: if, for example, a tranche were cancelled after the Effective Date, no portion of the front-end fee would be refunded to the borrower.

Comparative Sovereign MDB Loan Charges

LIBOR-Based USD Loans
(basis points)³

IBRD

IADB

AfDB

EBRD

ADB

VSLs*

FSLs**

Interest Spread:

Contractual spread

30

30

30

40

100

20

Risk Premium

-

5

-

-

-

Benefit of Sub LIBOR Funding⁴ Cost

-32

-30

-24

-

-

-34

Waivers

--

--

-15

-

-

-

Net Spread over LIBOR (I)

-2

5

-9

40

100

-13

Charges:

Commitment Charge

--

--

25

-

50

15

Waivers

--

--

-15

-

-

-

Net Commitment Fee

--

--

10

-

50

15

Spread Eqv. of Commitment Fee⁵(II)

--

--

4

0

23

6

Front-end Fee:

Contractual Front-end Fee

25

25

0

0

100

Waiver

-

-

Net Front-end Fee
25

25

0

0

100

0

Spread Eqv. of Front-end Fee⁵ (III)

3

3

0

0

14

0

Total Spread-Equivalent over LIBOR (I+II+III)

1

8

-5

40

137

-7

^{* Variable Spread Loans

** Fixed Spread Loans}

³ Numbers may not add-up due to rounding.

⁴The IBRD average cost margin (sub-LIBOR spread) shown for the VSL is for rate settings from January 1, 2008, through July 1, 2008. Sub-LIBOR spread for IADB is for 2007 Q2. The benefits of ADB’s sub-LIBOR funding cost are “rebated” to borrowers based on ADB’s sub-LIBOR funding margin for the previous semester, which in this table is for July 1, 2008 to December 31, 2008. A surcharge could arise if ADB’s funding cost is above 6-month Libor. In addition, any change in the contractual spread will be applied not only to new loans but also to existing loans through the rebate and surcharge system (the fixed spread in the loan agreement will remain unchanged).

5 Spread-equivalent computations for commitment charge and front-end fee useaverage project disbursement profile of 8 years. Repayment terms used are as follows: Final Maturity: 17 Years; Grace Period: 5 Years; Level repayment of principal. Disbursement profiles and payment terms vary across MDB's and hence spread-equivalent charges would vary based on the disbursement profile and payment terms used.

Historical LIBOR Equivalent of Lending Rates

Historical LIBOR-Equivalent of Lending Rates

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