IADB Borrowing Program and Liability Management Operations

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IADB Borrowing Program and Liability Management
Operations

• Fourth Annual Meeting of the Group of Latin
  American and the Caribbean Debt Management
  Specialists LAC Debt Group
• Port of Spain, Trinidad Tobago, May 14-16, 2008

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IADB Borrowing Program
Main Components

• Program Development
• Liquidity Policy Cash Flow projections ALM
  Guidelines
• Borrowing Strategy
• Goals Volume Cost of Borrowing Market
  Diversification (Long Term Market Access)
• IADB Borrowing Program Commitments
• Benchmark Issuance Maintain Yield Curve in USD
  Benchmarks Promote Liquidity

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Characteristics
IADB Borrowing Program

• Bond Documentation Global Debt Program
• Swap Documentation ISDA Master Agreement
  plus Credit Support Annex
• Definitions of Terms and Conditions Currency,
  Size, Maturity, Interest Rate, Business Day
  Convention, Listings, Format, Applicable Loan,
  Clearing/Settlement, among others

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Other Features
IADB Borrowing Program

• Investor Relation Program Marketing tools
  (Information Statement Quarterly Management
  Discussion Analysis Report, Marketing Brochure,
  among others), Non-deal Related Road-Shows,
  Presentations, International Conferences/Seminars,
  Workshops
• Additional Information Web site Bloomberg,
  Reuters
• US GAAP Mark-to-Market of Derivatives

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IADB Borrowing Program Highlights 2003 - 2007
Up to 2007, IADB has issued in the
following currencies AUD, BRL, CAD, CHF, CLP,
COP, CRC, EUR, GBP, HKD, HUF, INR, ISK, JPY, MXN,
NZD, PEN, PLN, TRY, TWD, USD and ZAR.
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Callable transactions are considered to the
first call date.
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Distribution by Type of Investor and by
Geographic Areas
IADB Borrowing Program
2007
2006
Asia 25
Asia 56
Europe/Middle East/Africa 25
Americas 50
Europe/Middle East/Africa 11
Americas 33
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IADB Borrowing Program
Secondary Market Performance 5-Year USD Sector
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IADB Borrowing Program
USD Benchmark Bonds
(Bonds of USD 1 billion or larger)
Up to 10 years
5.125 September 13, 2016 USD 1 bln
4.25 September 14, 2015 USD 1 bln
4.50 September 15, 2014 USD 1 bln
3.50 July 8, 2013 USD 1bln
Up to 5 years
3.50 March 15, 2013 USD 1.5 bln
4.75 October 19, 2012 USD 1 bln
4.375 September 20, 2012 USD 2bln
5.00 April 5, 2011 USD 1bln
Up to 3 years
7.375 January 15, 2010 USD 2bln
5.625 April 16, 2009 USD 1 bln
5.375 November 18, 2008 USD 1bln

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IADB Borrowing Program
Issuance By Type of Instrument
2006
2007
Structured 3
Straight 79
USD Global Benchmarks 18
Total Amount issued in 2006 USD 5.3 billion
Total Amount issued in 2007 USD 5.5 billion
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IADB Borrowing Program
Non-USD Benchmark Issuance


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IADB Borrowing Program Operational Supports

• Electronic Platforms
• Bond/ Swap Pricing-Valuation specialized
  software (Numerix, FINCAD)
• Debt Service BMS, OPICS.
• Swap Trading e-swaps platform.
• Bond issuance Matrix for structured products.
• Procedures and functions
• Manual of operations
• Segregation of Duties
• Authorized Signatures
• Internal and External Controls

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IADB Borrowing Program Summary

• Product Definition Asset Class Characteristics
• Operational Platform Profile Sophisticated
  Borrower but low volume of transactions
• Governance Fiduciary Responsibility
  Accountability Transparency Principal/Agent
  Problem
• ALM Vs. Borrowing Strategy Funding Guidelines
  Vs. Market Access

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IADB Borrowing Program IADBs Proposal Advisory
Service

• The IADB is looking forward to share its
  experience and knowledge on Borrowing Program,
  Strategy, and Operational Support issues, as well
  as help clients implement a DMO and its strategy
  and operations through the following actions
• Open access by the IADB clients to the Banks
  officer/s responsible/s for the specific task/s
• Ad-hoc seminars tailored-made to the clients
  request (small number of participants, hands on,
  and topic oriented)
• Advisory services about capital market areas of
  expertise
• Advisory services about the management of
  international reserves

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IADB Borrowing Program Contact Information

• Soren Elbech Chief, Treasury / Finance
  Department
• Ph. 202-623-1310 Email sorene_at_iadb.org
• Claudia Franco Chief, Client Support Section
  Treasury / Finance Dept.
• Ph. 202-623-2863 Email cfranco_at_iadb.org
• Esteban Molfino Senior Advisor Treasury /
  Finance Department
  Ph. 202-623-2369 - Email estebanm_at_iadb.org
• Laura Fan Head of Funding Treasury / Finance
  Department
• Ph. 202-623-3772 Email lauraf_at_iadb.org
• Andre Delgado Sr. Funding Officer Treasury /
  Finance Department
• Ph. 202-623-1381 Email andred_at_iadb.org
• Francisco Chong Funding Officer Treasury /
  Finance Department
• Ph. 202-623-2122 - Email franciscoch_at_iadb.org

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IADB Borrowing Program Contact Information

• James Ranaivoson Senior Advisor Treasury /
  Finance Department
• Ph. 202-623-2320, Email jamesr_at_iadb.org
• Carlos Franco Head of Investments Treasury /
  Finance Department
• Ph. 202-623-2362, Email carlosfr_at_iadb.org
• Roberta Fusaro Sr Investment Officer Treasury
  / Finance Department
• Ph. 202-623-2344, Email robertaf_at_iadb.org
• Pedro Campanario Sr Investment Officer
  Treasury / Finance Department
• Ph. 202-623-2315, Email pedrosa_at_iadb.org
• Virginia Korycki Treasury Officer Treasury /
  Finance Department
• Ph. 202-623-2214, Email virginiak_at_iadb.org
• Nobuhisa Abe Investment Analyst Treasury /
  Finance Department
• Ph. 202-623-2329, Email nobuhisaa_at_iadb.org
• Web Site www.iadb.org/fin/capitalmarkets

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IADB Borrowing Program Market Based Financial
Intermediary

• About US 6-9 billion in borrowings per year
• IADB is one of the most frequent international
  bond issuers in all major currencies
• Wide variety of products, maturities, and
  currencies
• US06-07 billion in derivative deals per year
• Full spectrum of derivative products
• US15-20 billion funds under management
• 98 assets managed in-house
• 2 assets managed externally
• Full spectrum of fixed income assets

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ANNUAL FUNDING VOLUMES OF IADB(Fiscal years
1997-2007, in billions USD)

• FY 2008 is estimated at US9 billion
• Volumes projected for FY 2008 and beyond are
  between US6 and US 10 billion

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IADB Borrowing Program Funding Strategy and
Objectives

• Provide cost-effective funding on a sustainable
  basis for financing economic development
• Meet investors needs
• Safe investments (Aaa/AAA credit rating)
• Wide choice of socially responsible investment
  products large and liquid bonds, and customized
  structured financing.
• Strong secondary market performance for liquid
  products
• Ensure high execution standards
• Broad sponsorship from underwriters
• Solid primary placement with a diversified
  investor base
• Consistent pricing

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Meeting Investors Needs Range of
Products(Fiscal years 1997-2007)

• IADB is a leader in offering a full range of
  products
• Benchmark bonds high liquidity spread
  performance
• Plain Vanilla bonds (also include local currency
  bonds and bonds targeted to retail investors)
• Structured notes tailored to investors
  individual needs

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Meeting Investors Needs Range of
Currencies(Fiscal years 1997-2007)

• IADB is a leader in accessing a broad range of
  currencies
• Structural market changes (e.g. introduction of
  the EUR) reduced the number of currencies in 1999