IDA launches U.S. discount notes program to expand short-term funding access

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IDA launches US discount notes

Highlights

IDA launches its U.S. Discount Notes Program on October 14, completing first issuances with purchases from the State of Illinois and other institutional investors.
The discount notes, issued as exempted securities and settled through Fedwire, align IDA with short-term issuance practices of other World Bank Group institutions.
U.S. Treasury, Congress, and Federal Reserve support enables IDA to lower financing costs and expand liquidity access, enhancing funding for global development projects.

Program structure and first investors

As announced by the World Bank, the International Development Association, or IDA, launches its Discount Notes Program on October 14 and completes its first issuances the same day. The short-term funding vehicle is designed to give the institution ongoing access to U.S. money markets and to add a flexible source of financing alongside its existing capital markets activities.

The first series of discount notes is purchased by the State of Illinois, along with other U.S. public sector investors, state and municipal treasuries, and corporate funds. IDA says the program is expected to attract a wider pool of institutional buyers active in short-term markets, including U.S. states and cities, bank treasuries and companies seeking high-quality short-term investments.

The primary dealers supporting placement of the notes are Academy Securities, Barclays Capital, CastleOak Securities, FHN Financial Capital Markets, Jefferies, Mizuho Securities USA, Siebert Williams Shank & Co., UBS Securities and Wells Fargo Securities. Jorge Familiar, vice president and treasurer at the World Bank Group, says the new platform can help lower IDA's financing costs over time, potentially freeing more funds for lending in jobs, infrastructure, resilience, health, education and economic opportunity.

U.S. policy support and market implications

The rollout is backed by support from the U.S. Treasury, bipartisan action in the U.S. Congress and operational work involving the Federal Reserve System. The text credits House Financial Services Committee Ranking Member Maxine Waters and her staff with advancing the legislation over many years, while Chairman French Hill is cited for helping secure final passage through the Senate.

IDA's discount notes are issued as exempted securities under U.S. federal securities laws and are issued and settled through Fedwire, the Federal Reserve Banks' settlement system. That structure aligns the program with the short-term note issuance framework already used by other World Bank Group institutions, including the International Bank for Reconstruction and Development and the International Finance Corporation.

The Federal Reserve Bank of New York serves as fiscal agent for the program. For IDA, the launch expands access to a large and liquid investor market while supporting its broader goal of reducing poverty and financing development across member countries.

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