WASHINGTON, CMC – The Inter-American Improvement Financial institution (IDB) says it has accomplished a risk-transfer transaction utilizing credit score insurance coverage safety with non-public insurance coverage corporations to assist diversify its portfolio and liberate capital for extra lending to Latin America and the Caribbean.
The Washington-based monetary establishment mentioned beforehand it pioneered credit-substitution transactions and ensures with different multilateral growth banks (MDBs) and governments. That is the primary such transaction with the non-public sector.
Credit score insurance coverage protects US$300 million of publicity on the IDB stability sheet, releasing capital that may be leveraged three to 4 occasions to extend growth financing and proceed bettering lives in borrowing member nations. It mentioned the transaction is distributed throughout 14 insurance coverage corporations in america, Asia, and Europe.
“This credit-risk-insurance transaction is an instance of the methods for capital effectivity and modern options in capital markets that the IDB makes use of to maximise lending capability and implement the suggestions of the G20-sponsored Unbiased Evaluate of MDBs’ Capital Adequacy Frameworks. ”
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