IBRD Lending Rates and Spreads Applicable on or after October 1, 2024 Rate Update Summary - Quarterly Update

Jul 19, 2026

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Quarterly memorandum from October 30, 2024 summarizing IBRD’s updated lending rates and spreads for loans with rate setting dates between October 1, 2024 and December 31, 2024. The update covers the IFL (IFL Variable Spread) pricing framework, including average funding spreads by currency, the pass-through funding cost principle, maturity premium mechanics, and reference-rate components such as SOFR, SONIA, TONA, and EURIBOR. It also details country pricing-group changes effective July 1 and a short-maturity offering effective October 15, 2024.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages9

Reading Time23 min

AccessFree to download

Rate Update Summary

Background

IBRD Flexible Loan Rates and Spreads

Maturity Premium

Short Maturity Loan (SML)

IFL Variable Spread Components

Public Disclosure Authorized Public Disclosure Authorized From: The President October 30, 2024 Memorandum Subject: IBRD Lending Rates and Spreads Applicable on or after October 1, 2024 Rate Update Summary This memorandum provides the quarterly update of IBRD’s lending rates and spreads pursuant to the standard loan pricing as defined in the Bank Policy and Directive “Financial Terms and Conditions of Bank Financing”. 1 The Average Funding Spreads applicable to the IBRD Flexible Loan (IFL) effective between October 1, 2024 and December 31, 2024 have been determined based on the new applicable alternative reference rates at the following levels2 : • EUR denominated loans: positive 1 bps; • JPY denominated loans: negative 16 bps; • loans denominated in USD and other currencies: positive 44 bps. I. Background IBRD offers financing through one loan product, the IFL, to eligible members.3, 4 The IFL is currently available in the form of the IFL Variable Spread, featuring variable spreads over the Reference Rate.5 IBRD currently offers IFLs with the following Reference Rates6, 7, 8 : • USD: Secured Overnight Financing Rate (SOFR); • GBP: Sterling Overnight Index Average (SONIA); • JPY: Tokyo Overnight Average Rate (TONA); • EUR: Euro Interbank Offered Rate (EURIBOR) . 1 Policy “Financial Terms and Conditions of Bank Financing,” Catalogue No. OPS5 .09-POL. 178, July 1, 2023, and Directive “Financial Terms and Conditions of Bank Financing,” Catalogue No. OPS5.09-DIR.140, July 1, 2023. 2 Please see Table 1 for detailed information. 3 Aside from IFLs, there are a few historic currency pool-based products, which have been discontinued but require rate resetting in IBRD’s portfolio. The only outstanding currency pool loans (CPL) with variable rate terms are the loans to Zimbabwe, which are currently in non-accrual status. There are also IFL and CPL loans whose rates are fixed for the life of the loan through conversion and hedging. 4 In addition, IBRD offers other financial products, including conversions and risk management/hedging products, guarantees, and disaster risk financing. 5 “Proposal to Suspend the Offering of Fixed Spread Loans and Spread-Fixing Conversions in the Context of LIBOR Transition”, R2020-0243/2, December 21, 2020. 6 “Proposed Modifications to IBRD and IDA New Loan Offers and Proposed Timeline for the Existing Loans Switchover to New Market Reference Rates in the Context of LIBOR Transition,” R2021-0129, June 23, 2021. 7 “Proposed Modifications to the IBRD and IDA General Conditions to add flexibility in reference rate replacement provisions,” R2018-0235, October 18, 2018. 8 “Proposal to Manage IBOR Transition Risks in IBRD Loan and IDA Non-concessional Financing Agreements Governed by General Conditions Prior to December 2018,” R2020-0029/1, March 3, 2020. This memorandum summarizes the lending rates and spreads currently applicable to IBRD loans with rate setting between October 1, 2024 and December 31, 2024. II. IBRD Flexible Loan Rates and Spreads9 Maturity Premium: IBRD differentiates its loan pricing based on national income and other factors of each Borrower (see Annex 2) through the maturity premium. 10 Borrowers are classified into four pricing groups, whose applicable maturity premium is differentiated by exemptions, discounts, or surcharges specific to each pricing group. The classification of the member countries by pricing group is updated annually and becomes effective on July 1 of each year (see Annex 2 for FY24 Country Groups for IBRD Pricing) . Country group eligibility for pricing group A was expanded to include all countries currently eligible for the Climate Resilient Debt Clause (CRDC) effective October 15, 2024.11 The maturity premium schedule offers Borrowers the flexibility to choose a desired maturity at the differentiated pricing level. Table 1 provides the details of the pricing group-specific maturity premium schedule. The details of rate

FAQs

What is the scope of the rate update in this memorandum?

The memorandum provides a quarterly update of IBRD’s lending rates and spreads for loans with rate setting between October 1, 2024 and December 31, 2024.

Which reference rates does IBRD use for the IFL variable spread?

IFL reference rates include SOFR (USD), SONIA (GBP), TONA (JPY), and EURIBOR (EUR), depending on the currency selected.

How are average funding spreads determined for IFL during the quarter?

Average funding spreads relative to the reference rate are calculated each January 1, April 1, July 1, and October 1 based on the actual average funding cost from the preceding six-month period.

Jul 19, 2026

Uploaded by Eden