From the course: Applied Fixed Income

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IBRD debt by currency

IBRD debt by currency

From the course: Applied Fixed Income

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IBRD debt by currency

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- [Instructor] Looking more closely at IBRD, they tend to finance their loans mostly in bond form. IBRD issues across numerous currencies, but primarily in U.S. dollar, as you can see on this pie chart here, where they issued 64% of their 2019 bonds in U.S. dollars. However, as you can see on this Bloomberg, a list of their recent bonds, they also issue in smaller emerging market currencies, such as Mexican peso, Russian ruble, and Indonesian rupe, in the form of euro bonds. IBRD, or IBRD, as it's called in the market, and other Supranational issuers are extremely sophisticated, as their panel dealers and other investment banks constantly provide funding and basis swap opportunities to them. Basis swap opportunities are a type of arbitrage that allow lenders and borrowers to take advantage of rate distortions based on shortages of certain funding or lending currencies. I won't go into the mechanics here, but for an example of how basis swaps would work, please refer to CFI's…

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