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ADB Announces Lending Rates for Multi-Currency and US Dollar Loans for the First Half of 2002

MANILA, PHILIPPINES (2 January 2002) - The Asian Development Bank (ADB) announced today that the lending rate on its pool-based US dollar loan facility will be 6.69 percent per annum for the period from 1 January to 30 June 2002. ADB will reduce its rate on the outstanding pool-based multi-currency loans from 5.21 percent to 5.08 percent per annum for the same period.

The interest rates on the ADB's pool-based multi-currency and US dollar loans are adjusted on 1 January and 1 July each year. For each facility, the lending rate is determined by adding a spread (currently 0.60 percent per annum) to the preceding six months' average cost of the respective pools of outstanding ADB borrowings established to fund such loans.

ADB's new loan product - a LIBOR (London interbank offered rate) based loan that offers borrowers more flexibility in the choice of currency and interest rate basis - has been available since 1 July 2001. ADB has stopped offering multicurrency loans since 1 July 2001. ADB will also withdraw its pool based US dollar loans from 1 July 2002.

As announced earlier, the new product will offer borrowers - in the public and private sector - loans in euro, Japanese yen, or US dollars with a choice of floating or fixed lending rate consisting of six-month LIBOR or the fixed rate equivalent of LIBOR, plus a spread fixed over the life of the loan. The new terms apply only to loans from ADB's Ordinary Capital Resources (OCR). Based on 6-month LIBOR rates for US dollars of around 1.98 percent per annum as of 26 December 2001, the new ADB product will offer significantly lower interest rates than its current lending rate for pool-based US dollar loans.

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