A/B Loan Structure
The A/B Loan product allows commercial lenders to partner with ADB in its lending operations and broader development mission. Through this program ADB, as lender of record, extends a loan to a borrower funded by commercial participants and ADB. The portion funded by ADB is referred to as the A Loan and the portion funded by commercial lenders referred to as the B Loan. Commercial lenders enter the transaction via a participation agreement to become participants, and through this mechanism each commercial participant may benefit from ADB's Charter-based privileges and immunities as well as ADB’s preferred creditor status.
The A/B Loan allows ADB to introduce new financing sources to its clients, mobilizing more funds for development projects. ADB partners with reputable commercial financial institutions that can act as B Loan participants – international and regional commercial banks, institutional and impact investors – provided they are not incorporated or residing in the country of the borrower or project. Through this diverse and growing investor base, ADB can assist borrowers by assembling syndicates to help finance their transactions.