World News

World Bank’s Malpass says U.S. subscribed to IBRD capital increase

WASHINGTON (Reuters) – World Bank President David Malpass on Thursday said the bank’s main lending arm for middle-income countries has received nearly $9.8 billion in subscribed capital from the United States that will help “materially” with the bank’s coronavirus response.

Only about $1.2 billion of the U.S. contribution is paid-in capital under a general $13 billion capital increase for the World Bank that was agreed in 2018. A World Bank official said the U.S. Treasury has sent the subscription papers for new shares associated with the IBRD capital increase to the bank.

In its $2.2 trillion coronavirus rescue legislation, the United States authorized a $3 billion contribution to the latest replenishment of the International Development Association, the World Bank’s fund for the poorest countries. The legislation also paved the way for the Treasury to subscribe to a $5.5 billion capital increase for the International Finance Corp, the World Bank’s private-sector lending arm.

The U.S. coronavirus act provides another $7.29 billion capital contribution to the African Development Bank.

Malpass, in a statement to the International Monetary Fund’s steering committee, said the IBRD sold $8 billion worth of 5-year global benchmark bonds at 0.7% on Wednesday in the largest-ever U.S. dollar denominated bond issued by a supranational entity. He said the bond was oversubscribed, with an order book that reached $12.5 billion from 190 investors.

(Reporting by David Lawder; Editing by Chizu Nomiyama and Daniel Wallis)