The major rating agencies have given the IDB their highest investment grade credit rating. Partners benefit from the IDB s understanding of political and economic fundamentals, financial and regulatory structures, and access to information in the region. In addition to loans, the IDB also provides credit and political risk guarantees to private sector lenders seeking coverage for their loans to projects in Latin America and the Caribbean. Guarantees are used for loans made in either local currency or U.S. dollars.
Coverage is applied to all or selected maturities of a given loan.
The IDB offers several types of political risk guarantees for debt instruments. Coverage needs are tailored for each project to cover specified risk events related to non-commercial factors. For example, a guarantee could cover default on debt service payments to a project company if a project was terminated early or a granting authority failed to make required payments. Guarantees can be provided for government contracts made at the sovereign or sub-sovereign level. This coverage does not include losses due to devaluation.