What is the quality of World Bank debt instruments?
The World Bank has been rated AAA, the highest possible rating available, for more than 40 years by the major credit rating agencies. This quality assessment is confirmed by the capital markets which have been welcoming World Bank debt instruments since the issuance of the first World Bank bond in 1947. There are six main reasons for the high degree of quality of World Bank debt instruments. First, World Bank debt is backed by the Bank’s 185 sovereign shareholders. Second, the World Bank follows highly prudent financial policies that restrict its lending to a maximum of one dollar in loans per one dollar of total capital – the current ratio is as low as 47 cents in loans per one dollar of capital. The financial leverage is equally low as the World Bank’s borrowings currently account for about 45% of its total capital. Third, the World Bank has achieved an annual operating income of above US$1 billion for over 15 years. Fourth, the World Bank maintains a highly liquid asset base in orde
