WASHINGTON, DC January 12, 2016 - As of 12:01 a.m. January 13, 2016, Washington D.C. time the fixed spread over LIBOR (or EURIBOR) will increase for all new IBRD Flexible Loans (IFLs). The new fixed spreads shown in the table below will apply to all fixed spread loans signed on or after January 14, 2016, local time at the place of signing.
| For IFL Fixed Spread Loans Signed On or After January 14, 2016 | ||||||
Average Repayment Maturity* (years) | Less than 8 Years* | Greater than 8 to 10 Years* | Greater than 10 to 12 Years* | Greater than 12 to 15 Years* | Greater than 15 to 18 Years* | Greater than 18 Years* |
Contractual Spread | +0.50% | +0.50% | +0.50% | +0.50% | +0.50% | +0.50% |
Maturity Premium | - | +0.10% | +0.20% | +0.30% | +0.40% | +0.50% |
Market Risk Premium | +0.10% | +0.10% | +0.10% | +0.10% | +0.15% | +0.15% |
Projected Funding Cost | +0.25% | +0.30% | +0.30% | +0.35% | +0.40% | +0.40% |
USD Lending Rate | LIBOR +0.85% | LIBOR +1.00% | LIBOR +1.10% | LIBOR +1.25% | LIBOR +1.45% | LIBOR +1.55% |
Change from Previous Pricing | +0.15% | +0.15% | +0.15% | +0.15% | +0.15% | +0.15% |
EUR Lending Rate** | Euribor +0.70% | Euribor +0.85% | Euribor +0.95% | Euribor +1.10% | Euribor +1.30% | Euribor +1.40% |
JPY Lending Rate** | LIBOR +0.50% | LIBOR +0.65% | LIBOR +0.75% | LIBOR +0.90% | LIBOR +1.10% | LIBOR +1.20% |
GBP Lending Rate** | LIBOR +0.80% | LIBOR +0.95% | LIBOR +1.05% | LIBOR +1.20% | LIBOR +1.40% | LIBOR +1.50% |
* As measured by average repayment maturity of the loan at commitment.
** A basis swap adjustment of -0.15% is applicable to EUR fixed spread, -0.35% is applicable to the JPY fixed spread, and -0.05% is applicable to GBP fixed spread.
The increase in the fixed spread is the result of an increase in IBRD’s projected funding cost. This change does not affect the pricing of IFLs with a variable spread.
Please contact Miguel Navarro-Martin for more information.
[1] Although there has been an increase in IBRD’s projected funding cost for all loans, including JPY, the basis adjustment for JPY has resulted in a decrease in the fixed spread for JPY-denominated loans.
[2] The basis adjustment refers to the difference between IBRD fixed spread loan pricing in US dollars and other major currencies.
