IDB Launches Indonesian Rupiah Sustainable Development Bond (SDB)

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new 3-year fixed rate Sustainable Development Bond (“SDB”) focused on SDG#3 (Good Health and Well Being) with JP Morgan as sole arranger in Indonesian Rupiah (IDR) valued in 55 billion, equivalent to $3.4 million.

This issuance follows IDB’s recent announcement that it would make up to $12 billion available to countries requesting support for the COVID-19 pandemic and its consequences. The IDB will concentrate support in four main areas: 

• The Immediate Public Health Response: Support for countries’ preparedness and response capacities to help contain the transmission of the virus and mitigate its impact, with resources to strengthen public healthcare systems and purchase supplies and equipment.

• Safety Nets for Vulnerable Populations: Measures to protect the income of the most affected populations through existing transfer programs, non-contributory pensions and grants. Other proposed measures include extraordinary transfers to workers in the informal sector and support for companies in sectors particularly affected by the crisis, such as tourism.

• Economic Productivity and Employment: Assistance to SMEs, which account for 70% of the region’s jobs, through financing programs and short-term liquidity guarantees, foreign-trade financing and guarantees, loan restructuring, and support for strategic supply chains.

• Fiscal Policies for the Amelioration of Economic Impacts: Support to countries in designing and implementing policies in three key areas: fiscal measures to finance the response to the crisis; continuity plans for the execution of expenditures and public procurement; and measures to support economic recovery.

This is IDB’s second SDB issuance following the break in US Dollars supply after days of turbulence in financial markets caused by the COVID-19 outbreak.