ADB Revises Lending Rates for US Dollar and Japanese Yen OCR Loans and Hard-Term ADF Loans

MANILA, PHILIPPINES - ADB has revised its lending rates for U.S. dollar and Japanese yen loans from the ordinary capital resources (OCR) and has announced the lending rates for hard-term loans from the Asian Development Funds (ADF).

From 1 January to 30 June 2008, the rebate for U.S. dollar LIBOR-based loans is 0.34% per annum, an increase from the 0.31% rebate in the previous period. For Japanese yen LIBOR-based loans, the rebate is 0.31% per annum, down from previous 0.45% level that included profit on the early redemption of borrowings that were passed as a saving to borrowers. The rebates reflect the average sub-LIBOR cost of borrowings from 1 July to 31 December 2007.

During the same period, the lending rate for U.S. dollar pool-based loans will decrease from 6.34% to 6.12% while the lending rate for the Japanese yen pool-based loans will change from 1.69% to 1.90%. The revised rates reflect the average cost of borrowings for the pools – 5.72% per annum for U.S. dollar and 1.50% per annum for Japanese yen from 1 July to 31 December 2007 plus a spread of 0.40% per annum, representing a lending spread of 0.60% less a waiver of 0.20%.

Based on the revised framework for ADF grants in December 2007, the lending rate for hard-term loans approved in 2008 is set at 3.15%. Hard term ADF loans, similar to the hard-term window of the International Development Association, are provided to certain ADF eligible countries with active OCR lending program and have terms that provide a higher degree of concessionality than loans funded from OCR but lower concessionality than the regular ADF loans. The lending rate is determined by the weighted average of the 10-year fixed swap rates of the special drawing right (SDR) component currencies less 1.50% plus the OCR effective contractual spread. The rate will apply to all hard-term loans approved in 2008 and will be fixed for the life of the loan.

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