Sorry, search returned zero results

Please Input a Valid Search String.

General
1. What is AIIB’s background?

The Asian Infrastructure Investmnet Bank (AIIB) is a multilateral development bank (MDB) established by international treaty and headquartered in Beijing, China, founded to bring countries together to address Asia’s infrastructure funding gap, estimated at USD26 trillion through 2030.1 Our core principles are openness, transparency, independence and accountability.

2. What is the nature of AIIB's membership?

AIIB is open to shareholders who are dedicated to promoting economic and social development across Asia and beyond. Our membership is open to members of the International Bank for Reconstruction and Development or the Asian Development Bank. Please see our current membership here.

3. What is AIIB’s mission?

AIIB’s primary focus is on financing projects that benefit the economic and social development of Asia. Projects should support sustainable infrastructure, cross-border connectivity and private capital mobilization.

4. Are there any specific features that differentiate AIIB from the other MDBs?

Projects can be based in any member shareholder, as long as the project will deliver benefits to the Asian region. All financings must meet the conditions set out in AIIB’s Environmental and Social Framework (ESF), which ensures that all projects are contributing to sustainable development.

5. Where is there evidence that AIIB projects are compliant with the latest in socially responsible, environmentally-friendly lending practices?

AIIB developed its ESF, including the ESP, based on consultation with Member Governments, other MDBs and a wide range of external stakeholders, including NGOs and CSOs. The ESF was developed with consideration given to the objectives of the United Nation’s Sustainable Development Goals (SDGs) and the Paris Climate Accord.

6. What is AIIB’s credit rating?

AIIB is rated triple-A by Standard & Poors, Moody’s and Fitch Ratings. Our credit strength is based on several factors; 1) significant subscribed capital base of USD100 billion, of which USD20 billion is paid-in (among the highest in absolute terms of all MDBs), 2) conservative financial risk management and liquidity management policies, managed to maintain the triple-A ratings, 3) committed global shareholder base, 4) preferred creditor treatment, 5) diversified loan portfolio across sectors and countries, and 6) experienced management team.

7. In five years’ time, what is the forecasted distribution of loans by sector and by country?

There are no concrete forecasts over a five-year horizon, as AIIB’s portfolio is evolving. Our lending is demand-driven and depends on the financial sustainability of project proposals. AIIB has not put any hard limits on investments by sector as long as AIIB’s risk exposure remains within allowed limits. The only hard limits we maintain on lending are 1) no single country exposure may be more than 50 percent of total available capital, and 2) the sum of the top three country exposures may not account for more than 90 percent of total available capital. In terms of sectors, we expect investments will be made mainly in the energy, transport and urban/water sectors.

8. What is the forecasted scope and usage of the Project Preparation Special Fund over the coming years?

AIIB deploys funds available via the Project Preparation Special Fund facility on terms and conditions consistent with the purpose and functions of AIIB. These funds are managed separately and are entirely independent from our Ordinary Resources. Currently, AIIB operations one Project Preparation Special Fund facility, with contributions from China, Hong Kong-China, Korea and the United Kingdom. Monies are transferred to AIIB as grants and do not represent contributions from all members.

9. Is AIIB connected to the other MDBs?

AIIB is working with other MDBs to learn from their experiences and enhance AIIB’s operating efficiency, product offerings and reduce costs. We have signed a co-financing framework agreement with the World Bank. We have also signed Memorandums on joint cooperation and co-financing with: the African Development Bank, the African Development Fund, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank and Inter-American Investment Corporation, the Islamic Development Bank Group, the New Development Bank and the World Bank Group.



1 Source: "Meeting Asia’s Infrastructure Needs", ADB 2017

Debt Issuance and Treasury
1. What is the Asian Infrastructure Investment Bank's (AIIB) borrowing program?

AIIB’s funding program is expected to be several billion US Dollars per annum over the next several years of capital markets issuance. Funding needs are expected to rise gradually to reach circa USD10 billion per annum by the mid-2020s.

2. Will AIIB bonds enjoy the same status and debt issuance platforms as other MDB bonds?

AIIB shares a similar general status and exemptions as other MDBs. For example, AIIB liabilities carry a 0 percent risk weight and HQLA 1 status by the BIS, and AIIB is not subject to taxation by the member shareholders in which it operates. We are currently in the process of establishing our principal funding platforms.

3. In what currency sectors are you planning to issue?

AIIB is a US Dollar-based institution and our first public benchmark bond is expected to be in the USD markets. The maturity of the first benchmark will be a function of investor demand. The Funding Team’s core objective is to be viewed as a flexible, transparent and responsive issuer, providing liquid public offerings and reverse-inquiry, tailor-made investment solutions. We will diversify into primary currencies at a later stage and selectively add additional currencies in line with underlying demand trends.

4. What investors are you seeking to engage for the first benchmark?

We are looking to attract a broad range of global investors to our funding program. These are expected to range from central banks, sovereign wealth funds and bank treasuries, to fund managers, corporate treasuries, insurance companies and pension funds.

5. Is AIIB targeting the development of a liquid benchmark curve of outstanding debt?

Within the constraints of a limited borrowing need over the next few years, AIIB will consider the value of creating a liquid benchmark curve if underlying market conditions and investor demand are supportive. Given our policies dictate that we cannot have more than 30% of all debt redemptions falling due within any single 12-month period on a rolling basis, we can reasonably expect to issue across different maturities.

6. Will AIIB have access to the derivatives markets to manage risk?

AIIB Treasury is in the process of discussing ISDA agreements with a range of counterparties, and expect to have several contracts signed before our first benchmark is priced.

7. Will AIIB provide a Kangaroo, Kauri or Islamic Finance Program and/or open a Uridashi Shelf?

Our product range, both in terms of currency and issuance platforms, will evolve over time to reflect investor appetite. Should cost-effective opportunities be available in niche sectors on a sustainable basis, AIIB will consider creating dedicated programs to access any discrete liquidity pools.

8. AIIB’s lending operations support sustainable development, within the context of the Environmental and Social Framework. Will you offer Green Bonds or "Theme Bonds" in future?

The integrity of AIIB’s ESF, which stands at the core of our investment philosophy, ensures that all AIIB investments can be considered "sustainable". We intend to adopt "Use of Proceeds" language for all bond documentation that dictates that all projects must comply with our stringent review framework, which includes compliance with our ESF policy. We therefore expect that all our debt instruments will be eligible for SRI investor portfolios.

9. Are dealers committed to making markets in AIIB bonds?

Our underwriters are expected to deliver two-way liquidity over the life of the bonds on which they serve as syndicate members, subject to underlying liquidity trends. While AIIB does not maintain formal market-making agreements with its banks, we will consider on-going dealer support for our outstanding debt as one supporting factor when awarding mandates for new issues.

10. Will AIIB operate a buyback facility for its debt products?

AIIB is committed to offering investors and dealers a buyback price for non-benchmark debt securities. Such prices will be based on prevailing market levels. For any buybacks, we will only transact with approved financial counterparties (e.g., our dealers and underwriters), to ensure our operational risk is minimized.

11. Where is liquidity invested?

AIIB’s Treasury invests in a range of eligible assets. These include bank deposits, trust funds and eligible, liquid USD securities. Deposits with banks must be with institutions holding a minimum A rating. AIIB cannot hold more than 15% of total liquid assets in any single financial institution.

Eligible securities issued by sovereigns, sovereign agencies and MDBs must hold a minimum AA rating. Corporate and asset-backed securities maturing in 13 months or longer must be rated AAA and when maturing in less than 13 months, corporate and asset-backed securities must be rated A-1 or P-1. Investments in money market or mutual funds are only permissible when the underlying funds invest in AAA-rated instruments.

12. Who is your regulator?

As a MDB, AIIB has no national regulator.

13. Where can I find more information on AIIB bonds?

AIIB will list public offerings on a major international exchange. Pricing should be available there on a regular basis. Price transparency and bond details should also be visible via electronic media, such as Bloomberg under the AIIB ticker: <AIIB>. AIIB’s website contains a dedicated section for Treasury activities, www.aiib.org/treasury, and includes a broad range of investor marketing materials. Further questions may be addressed to the Funding Team email: treasury@aiib.org.