How can borrowers access IBRD Hedging Products?
Borrowers can access stand-alone hedging products at any time during the life of a loan – other than the IBRD Flexible Loan and the Fixed Spread Loan – after signing a Master Derivatives Agreement with the Bank. A borrower may choose to use IBRD Hedging Products to effectively transform its loans, on one or more occasions, whether to fix, unfix, or re-fix the interest rate, to establish caps or collars on a variable rate, to change the currency of obligation, or to link debt service payments to the spot price of a particular commodity or commodities. IBRD Hedging Products are also available for debt owed by IBRD sovereign clients to creditors other than IBRD. Currently, the instruments offered for non-IBRD debt are interest rate and currency swaps as well as stand-alone weather hedges to mitigate losses related to adverse weather conditions such as droughts. Under non-IBRD hedging, countries that satisfy the client eligibility criteria established by IBRD are able to access both curren
