The World Bank has broken ground by issuing the
world’s first bond denominated in Special Drawing
Rights (SDR) since the 1980s. But adding the renminbi (RMB) to
the bond’s underlying composition before the
currency was officially incorporated in the SDR basket made the
drafting of the terms and conditions a challenging task.
The International Bank for Reconstruction and Development
(IBRD), which operates as part of the World Bank Group, raised
$700 million worth of SDR bonds in China’s
interbank bond market on August 31. This came less than three
weeks after the People’s Bank of China approved
the World Bank’s new SDR Denominated Issuance
Programme on August 12.
According to an August 26 disclosure document filed with the
Shanghai Clearing House, the World Bank’s SDR
programme is restricted to a total size of issuance of no more
than SDR20 billion with the quota being...