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IBRD Financial Products

Financial Products FAQs

Terms of the IBRD Flexible Loan (IFL)

  1. The variable spread has three components:

    i.IBRD’s contractual lending spread, which is fixed during the loan’s life;

    ii.The maturity premium, which depends on the country’s lending group and average maturity of the loan and is also fixed during the loan’s life; and

    iii.IBRD’s average cost of funding relative to the reference rate. The reference rate varies by currency (SOFR for USD, TONA for JPY, SONIA for GBP and EURIBOR for EUR). It slowly passes through to borrowers IBRD’s actual cost of funding in the market and is revised every quarter.

    For latest information on loan spreads, please visit: IBRD Lending Rates.

Local Currency Financing

  1. In addition to major currencies, IBRD financing is available in a growing list of local currencies. For information on loan currency, please visit Local Currency Financing.

Hedging Products

  1. Borrowers can access stand-alone hedging products at any time during the life of a loan - other than the IBRD Flexible Loan and the Fixed Spread Loan - after signing a Master Derivatives Agreement with the Bank. A borrower may choose to use IBRD Hedging Products to effectively transform its loans, on one or more occasions, whether to fix, unfix, or re-fix the interest rate, to establish caps or collars on a variable rate, to change the currency of obligation, or to link debt service payments to the spot price of a particular commodity or commodities. 

    IBRD Hedging Products are also available for debt owed by IBRD sovereign clients to creditors other than IBRD. Currently, the instruments offered for non-IBRD debt are interest rate and currency swaps as well as stand-alone weather hedges to mitigate losses related to adverse weather conditions such as droughts. 

    Under non-IBRD hedging, countries that satisfy the client eligibility criteria established by IBRD are able to access both currency and interest rate swaps on their non-IBRD debt, subject to overall program limits as well as country-specific volume limits as approved by the Executive Board. Currency swap volume limits for each country are based on the size and maturity structure of that country’s outstanding IBRD loan portfolio. Interest rate swaps may be substituted for currency swaps at a rate of five to one. 

    For information on pricing, currency, maturities, and amounts of IBRD Hedging Products, please see Financial Risk Management.

Legacy Financial Products

  1. Borrowers with VSLs have two options to manage their currency and interest rate risks: (1) request currency and / or interest rate conversions following amendments to the relevant loan agreements; and (2) sign a Master Derivatives Agreement with IBRD to access stand-alone currency and interest rate swaps.

General Questions

  1. Contact Loan Client Services about loan accounting issues such as billing, loan obligations, etc. by sending an email to: