Skip to Main Navigation
PRESS RELEASE April 1, 2017

Change of Calculation Frequency of Variable Spread for IBRD Flexible Loans

WASHINGTON, DC April 1, 2017 - Starting from April 1, 2017, IBRD will calculate the average funding spread component of the Variable Spread for IBRD Flexible Loans (IFL) on a quarterly basis rather than semi-annually.

The pricing principle of the Variable Spread loan is to pass through IBRD’s actual cost for funding loans to the borrowers. This allows borrowers to benefit from IBRD’s favorable access to capital markets, as well as its AAA rating and leading position among supranational issuers.

Currently, the average funding spread component of the Variable Spread is calculated every June 30 and December 31.  From April 1, 2017, IBRD’s average funding cost will be calculated quarterly, based on the actual cost incurred for funding Variable Spread loans during the previous six months, and apply to rate resets for the following three months. The table below summarizes the new calculation schedule and the rate reset dates to which they apply.

New Average Funding Spread Recalculation Schedule

Average Funding Spread Calculation Date

Applicable Loan Rate Reset Date

June 30

July 1 - September 30

September 30

October 1 - December 31

December 31

January 1 - March 31

March 31

April 1 - June 30

Increasing the frequency of the calculation will pass through IBRD’s sub-LIBOR funding spread more accurately to borrowers. Note that borrowers will still receive billing on a semi-annual basis.

Please contact Miguel Navarro-Martin for more information.