FREQUENTLY ASKED QUESTIONS

The Asian Infrastructure Investment 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.

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.

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.

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.

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.

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.

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.

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.

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

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.

AIIB shares a similar general status and exemptions as other MDBs. For example, Basel Committee on Banking Supervision has agreed that supervisors may allow banks to apply a 0% risk weight to claims on AIIB (BIS Press Release: here) 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.

AIIB is a US Dollar-based institution and our first public benchmark bond was issued in USD on May 16, 2019. The SEC registered, USD 2.5 billion five-year bond attracted over USD 4.4 billion of orders from over 90 investors across the globe representing 27 countries. 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 by adding further debt issuance programs allowing us to add other currencies and structures to meet the needs of a global investor base.

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.

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.

AIIB has ISDA master agreements in place with several market counterparties and is working to bring further relevant counterparties online to meet the bank’s needs.

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.

The integrity of AIIB’s ESF, which stands at the core of our investment philosophy, ensures that all AIIB financings can be considered "sustainable". We have adopted "Use of Proceeds" language for our bond documentation that dictates that all financings must comply with the principals our stringent environment and social criteria. All AIIB bonds are Sustainable Development Bonds and we would therefore expect that all our debt instruments will be of interest to SRI investor portfolios.

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 consider on-going dealer support for our outstanding debt as one supporting factor when awarding mandates for new issues.

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.

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 minus 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 A 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.

As an MDB, AIIB has no national regulator.

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.

LIBOR, or the London Interbank Offered Rate, is a global benchmark interest rate for financial products dating back to 1986. It is the result of daily submissions for periods from overnight to 12 months by a reference panel of between 11 and 16 contributor banks for each LIBOR currency. LIBOR is then calculated and published for each relevant currency and tenor (GBP, USD, JPY, CHF and EUR — but only for legacy contracts).

The financial crisis of 2009 revealed weaknesses in LIBOR as it behaved inconsistently and unpredictably compared to other observable market rates. The Financial Conduct Authority (FCA), a regulatory body in the United Kingdom and regulator of LIBOR, has called for a market transition away from LIBOR and to a more robust reference rate. Other regulatory bodies have also been supportive of a transition away from LIBOR because reform efforts have fallen short of agreed standards for financial benchmarks.

LIBOR for USD, GBP, JPY, CHF will be affected by LIBOR Transition. As of January 1, 2022, LIBOR has ceased to be published for GPB, JPY, and CHF. LIBOR for USD is expected to cease publication from July 1, 2023.

Regulators have not expressed an intention to replace EURIBOR, or the Euro Interbank Offered Rate, which has been reformed and will continue to be published by the European Money Markets Institute (EMMI).

The Alternative Reference Rates Committee (ARRC) convened by the US Federal Reserve to oversee the transition process away from LIBOR for USD, has named the Secured Overnight Financing Rate (SOFR) as its recommended alternative to USD LIBOR.

SOFR, or Secured Overnight Financing Rate, is a US Treasuries overnight repo financing rate published daily by the Federal Reserve Bank of New York at 8 a.m. Eastern Time. SOFR is calculated as a volume-weighted median of transaction-level data from tri-party treasury repo collected by BNY Mellon, general collateral repo data collected by the Depositary Trust and Clearing Corporation, and bilateral treasury repo data collected by the Fixed Income Clearing Corporation.

It is the interest rate a party will pay to a borrower overnight after posting US Treasury securities as collateral.

SOFR meets the following requirements for international benchmark regulation:

• Benchmark Quality—it is highly liquid, involves a large volume (difficult to manipulate) and is very resilient;
• Methodological Quality—it uses standardized terms for data inclusion, transparency and data availability; and
• Accountability and Governance—it utilizes a process and governance structures which comply with International Organization of Securities Commissions (IOSCO) Principles and is produced by the New York Fed as a public good.

There are a variety of SOFR conventions, including compounded SOFR rate and term SOFR rate. A compounded SOFR rate is a rate where interest is determined during an accrual period by observing and compounding daily SOFR in arrears. Term SOFR rates set a SOFR based rate in advance for period of one, three, six or twelve months.

Whereas LIBOR is a term rate, with a tenor matching the length of the interest period (e.g., 6-month LIBOR rate used for loans paying on a semiannual frequency), SOFR is an overnight rate. To determine the rate applicable for an interest period, the SOFR rate must be observed daily and then each daily observation would be averaged or compounded to arrive at the rate for the full period. Therefore, the rate applicable to the interest period is only known at the end of the period, whereas LIBOR is known at the beginning of the interest period. Finally, SOFR differs from LIBOR in that it is a secured rate (i.e., it has no credit element).

The SOFR Index measures the cumulative impact of compounding the SOFR on a unit of investment over time, with the initial value set to 1.00000000 on April 2, 2018, the first value date of the SOFR. The SOFR Index value reflects the effect of compounding the SOFR each business day and allows the calculation of compounded SOFR averages over custom time periods. Each business day, the New York Fed publishes the SOFR Index on the New York Fed's website, shortly after the SOFR is published at approximately 8:00 a.m. ET.

Latest SOFR, SOFR Averages (30, 60 and 90 days) and SOFR Index data is available on the Federal Reserve Bank of New York’s SOFR Averages and Index Data page. The page also provides historical overview of the mentioned SOFR rates. For more information on the SOFR Averages and Index publication schedule and methodology, please also see Additional Information about Reference Rates Administered by the New York Fed.

AIIB has selected compounded daily SOFR in arrears without lookback, lockout, or shifts as its SOFR based rate for sovereign backed financings. This compounded daily SOFR rate is implemented in the Bank’s systems via SOFR Index.

AIIB will employ a Proxy Rate and True-Up billing approach for every six-month interest period. This means that for the first four months the reference rate is the compounded observed SOFR rate, calculated via the SOFR Index, and for the remaining two months a Proxy Rate is based on the observed SOFR rate of the fourth month. This will be the basis of the billing that will be sent to the borrower at the beginning of month five. The borrowers will then have just under two months to process the payment. At the end of the interest period the actual SOFR rate for the final two months, the True-Up Rates, will be determined and will be used to calculate a True-Up Amount. The True-Up Amount would be the difference between the amount billed and the amount due based on actual True-Up Rates and will be billed in the subsequent interest period. The True-Up Amount would also include any adjustment due to any changes in the loan notional that occurred after billing (as per current practice and not dependent on SOFR dynamics).

The interest for the entire interest period is floored at zero.

The replacement of LIBOR with a new SOFR based reference rate requires an adjustment spread to be added to the replacement rate to reduce any transfer of value in existing contracts. This spread represents a credit risk adjustment to reflect the difference between secured SOFR rate and unsecured LIBOR rate. The spread over SOFR reference rate only optically looks higher because SOFR reference rate is lower than LIBOR, however, there is no economic change to your all-in interest rate because of switching from a LIBOR loan to a SOFR loan.

The adjustment spread for fixed spread sovereign backed loans will be based on a spread difference between SOFR and LIBOR calculated as a historical median over a five-year lookback period as defined by the International Swaps and Derivatives Association (ISDA).

A forward-looking SOFR term rate has been recommended for use from July 29, 2021, for certain cash products and derivatives hedging those cash products according to the announcement by the Alternative Reference Rates Committee (ARRC), a group of private-market participants convened by the Federal Reserve Board and the Federal Reserve Bank of New York in 2014 to help ensure a successful transition from USD LIBOR to SOFR as a more robust reference rate. However, AIIB plans to offer only a SOFR compounded-in-arrears sovereign product and currently has no plans to issue a sovereign SOFR term rate product.

AIIB has established a LIBOR Transition Steering Group led by the Bank’s Chief Financial Officer to oversee the implementation of transitional arrangements with the Bank’s sovereign and nonsovereign clients, as soon as practicable, to facilitate the smooth transition to the LIBOR replacement rate. Part of the work involves preparing the Bank’s internal operations for the change, with primary emphasis on its IT systems and treasury operations.

A new reference rate (i.e., SOFR for USD loans), including an adjustment spread to adjust for the differences between LIBOR and the replacement rate, will replace the six-month LIBOR for the Fixed Spread sovereign-backed loans. The same methodology already used for calculating the borrowing cost for Variable Spread sovereign-backed loans (VSL)—the use of the weighted average cost of AIIB’s liabilities to price said borrowing cost—will remain the same.

The Bank actively manages the transition process by creating transition provisions for new and existing loan contracts and engages with sovereign and private sector borrowers and the wider community of lenders with a view to put these provisions in place to facilitate a quick and efficient transition to the LIBOR replacement rate.

With the approval of its Board of Directors, AIIB amended the standard or General Conditions present in each sovereign and sovereign-backed loan. With this approval the Bank is enabled to proceed to unilaterally amendment its loan portfolio to transition LIBOR to compounded SOFR.

Changes have been approved to the Bank’s General Conditions on October 22, 2021.

The syndicate of financiers, including AIIB, and the borrower will need to agree on transition provisions and/or LIBOR replacement provisions. The existence of multiple lenders will mean that more entities are required to agree to such provisions before these can be implemented. AIIB is working with other multilateral development banks (MDBs) with a view to agreeing on a consensus approach to such provisions and anticipates that commercial banks will also take a similar approach over time.

It will depend on the terms of each loan. Outcomes could include: (i) the last LIBOR benchmark rate published is permanently locked in as the benchmark rate; (ii) the LIBOR rate (if it is still being published) will still be used but it will no longer be a representative rate (known colloquially as “zombie” LIBOR); (iii) references rates quoted by other financial institutions (if they are prepared to provide such quotes, which may also not be representative) will be used; or (iv) the Bank’s actual cost of funds will be used. Some contracts may not be well designed for the discontinuance of LIBOR. It is recommended that contracts be updated to include LIBOR fallback language to ensure an orderly process. AIIB plans to update all contracts.

Borrowers should take a proactive approach to identifying existing LIBOR exposures, discuss their existing agreements with their lenders and hedge providers and seek agreement on transitional arrangements at the soonest possible time so as to ensure they have arrangements in place. This will facilitate the transition to the LIBOR replacement rate when it is known.

Different approaches are being considered in different jurisdictions. Clients will need to liaise with each lender and each hedge counterparty to determine exposures and impact how best to manage this.

There are several training providers on the subject, the list below shows a few examples.

ICMA ICMA and AFE joint webinar: The end of LIBOR and the transition to risk-free rates (icmagroup.org)

Risk.net Course Agenda - Ibor Readiness and Implementation (risk.net)

London Financial Studies IBOR Transition Course - London Financial Studies (londonfs.com)

The Institute for Financial Markets Leaving LIBOR: Understanding and Managing the Transition | The IFM

Bloomberg LIBOR Transition Solutions | Bloomberg Professional Services

Refinitiv LIBOR Transition and Replacement Rate Solutions | Refinitiv

As of January 2021, AIIB can offer financings in multiple hard and local currencies. In addition to Australian Dollar (AUD), British Pound (GBP), Canadian Dollar (CAD), Chinese Renminbi (RMB), Euro (EUR), HK Dollar (HKD), Japanese Yen (JPY), Korean Won (KRW), Mexican Peso (MXN), New Zealand Dollar (NZD), Norwegian Krone (NOK), Singapore Dollar (SGD), Swedish Krona (SEK), Swiss Franc (CHF), and US Dollar (USD), operational currencies available to nonsovereign-backed clients and certain public sector entities are Indian Rupee (INR), Indonesian Rupiah (IDR), Malaysian Ringgit (MYR), Philippine Peso (PHP), Thai Baht (THB), and Turkish Lira (TRY). AIIB expects to add currencies, which will include both major non-USD hard currencies and local currencies based on AIIB’s ability to fund itself in those currencies.

Local currency financing has several benefits for clients:

• Reduction in earnings volatility due to FX movements,
• Decrease of debt burden in case of local currency depreciation,
• Reduced possibility of financial distress, and
• Possibility of borrowing local currency in longer tenor.

Local currency financing has several benefits for AIIB:

• Stronger credit of the loan portfolio,
• Access to loan markets that only operate in the local currency, and
• Expansion of the product range.

AIIB uses the following approaches for its local currency funding:

• Initially, AIIB will access back-to-back funding through swaps to finance a specific project.
• At a later stage, AIIB may will rely on pool funding, where it maintains a pool of liquidity through swaps and offshore bonds in a certain local currency to finance various projects.
• AIIB may also engage in funding through onshore bond issuances.

At the time of the disbursement of a local currency loan, or the conversion of a USD disbursement or an outstanding USD loan balance into local currency, AIIB will execute a funding or hedging transaction to raise the local currency in the market. The profile of such funding/hedging operation will be structured to match the maturity, interest rate type, repayments and other terms of AIIB’s loan to the client so that AIIB is hedged from any currency exposure. In some cases, the tenor of the market instruments may be shorter than the tenor of the loan, in which case, the client takes on the risk of interest rate and currency changes upon expiration of the funding or hedging instrument. In general, the availability of local currencies is always subject to the market conditions in each market at the time of transaction.

The availability of local currency financing is subject to AIIB’s access to the specific local currency market and the liquidity of said market. AIIB will determine the feasibility of accessing the market on a case-by-case basis, as well as the maturity and costs of the transaction.

Local currency financing is available to private sector clients and certain public sector entities.

Disbursements can be made in the local currency, or in USD (or other currencies), subject to the loan documentation. If it is not possible to source the local currency in a size, tenor and rate required by the client at the time of the disbursement request, the client may request disbursement in USD (or another agreed currency) instead.

Pricing components for local currency loans for nonsovereign-backed clients are as follows:

1. AIIB’s cost of funds in local currency
1. if funding through bonds:
• Cost based on local market-based benchmark (government bond yield or a relevant reference rate),
• Issuance or execution costs (underwriting fees, execution costs), and
• Recurring costs (listing, custody, payment fees).
2. if funding through swaps:
• swap rate or a relevant reference rate.
2. Client or project spread (negotiated separately for each loan)
3. Front-end fee
4. Commitment fee

For currencies other than USD, the applicable benchmark rates are the interest rates in the domestic market of the underlying currency.

The following mechanisms are available:

• At the loan origination. Borrowers can, at the time of the loan origination, request that the loan is denominated in local currency, and each disbursement and its currency of repayment will be made in the local currency.
• Conversion request after disbursement. Borrowers can request the conversion of all or a portion of the disbursed amounts into local currency, at any time during the life of the loan. Conversion of already disbursed amounts into a local currency will be available if AIIB can effectively source local currency through swap markets or a bond issuance.

The standard disbursement notice period is 15 business days.

This depends on each market. In some countries, financial markets are fairly developed while some are less so. There are limits by size, tenor, or structure, beyond which market counterparts will not trade or will trade only at a price that may be prohibitive. Please liaise with AIIB Treasury on specific terms.

If the local currency financing was arranged through a cross currency swap, clients can prepay all or part of the disbursed and outstanding amount during the life of the loan, by notifying AIIB in accordance with the relevant provisions of the loan documentation and paying the corresponding breakage and other related costs. If the local currency financing was provided through a bond issuance, the client cannot prepay the loan until the maturity of the matching bond issuance.

Borrowers can cancel all or part of the undisbursed balance. Prepayment or cancellation charges may apply in case AIIB incurs costs as a result of loan prepayment or cancellation by a client.

The amount of break costs reflects what AIIB needs to pay to the swap counterparty for unwinding an existing—or executing an offsetting—swap. This unwinding cost is calculated as a sum of the net present value of future cash flows of the two legs of the swap at a future point in time, using market curves (e.g., interest rate, foreign exchange, currency basis) and calculated as of the day when the client wishes to prepay or amend the loan.

The break cost is an amount that is a greater than zero, that AIIB needs to receive from the client, derived by subtracting present value of all future local currency cashflows from the sum of the local currency loan principal and accrued interest.

The amount of break costs cannot be calculated in advance simply because the market rates change daily and are not available for future dates.

All the local currency-specific provisions are outlined in the loan documentation. In addition to the standard loan provisions, the loan documentation may include clauses relating to currency availability, currency substitution, break costs in case of voluntary or mandatory prepayment, or any changes to the payment of interest or principal, or failure to take disbursement after a request is sent, or increased costs related to funding or hedging arrangements.

No, AIIB does not offer standalone hedging products to its clients at the present time.

The currency conversion rate and corresponding interest rates are determined when AIIB executes the corresponding funding or hedging transaction, matching each individual disbursement date.

AIIB will execute a funding/hedging transaction to cover each disbursement, which means that the client will bear all currency and interest risks until all disbursements are completed. Subject to market conditions, if the client agrees to submit an irrevocable disbursement request (containing the predetermined schedule of disbursements, interest and principal repayments), it may be possible to determine the currency and interest rate for the required amount of the loan. A clear cost recovery mechanism would need to be in place in the event of a request to modify this schedule.

A Variable Spread Loan (VSL) product allows AIIB to directly pass its cost of borrowing to borrowers of its sovereign-backed loans. The VSL interest rate is the sum of the contractual lending spread, maturity premium, base rate (such as LIBOR) and borrowing cost margin. The borrowing cost margin is recalculated every January and July, taking into account the cost of AIIB's outstanding bond issuance.

Under a VSL, borrowers can benefit from AIIB’s actual funding cost as a triple-A rated institution, as compared to the projected funding cost under a Fixed Spread Loan (FSL). This advantage may vary over time depending on future market conditions.

No. Currently, the following MDBs are also offering VSLs: International Bank for Reconstruction and Development (IBRD), African Development Bank (AfDB), Asian Development Bank (ADB) and Inter-American Development Bank (IADB).

There is no possibility for retrospective application to past accrual periods; nor is there a possibility to have a part-variable spread and a part-fixed spread in a single loan. For borrowers who elect conversion from fixed to variable spread, the variable spread rate will apply to the outstanding disbursed amounts starting from the interest payment period after the effectiveness of conversion. The effectiveness of conversion is the date of AIIB approval of the conversion request.

For an FSL, the spread is determined upon loan signing. For a VSL, the spread is determined at the determination dates semi-annually.

The unique feature of an FSL is that it insulates the borrower from changes in AIIB’s own funding cost. FSL pricing is composed on the following components: (a) cost base rate of six-month USD LIBOR, which is the same for FSL and VSL; and (b) four spread components: contractual lending spread, maturity premium, projected funding spread and market risk premium. The contractual lending spread is the same for all borrowers—it compensates for taking the average portfolio risk and covers administrative expenses. The maturity premium is applied to loans based on their individual average maturity—it compensates for additional economic capital deployment for longer tenor loans. The projected funding spread and market risk premium both cover the risk of refinancing of AIIB, and vary depending on the average loan life.

The fixed spread remains constant during the loan tenor. The Bank also charges a commitment fee and front-end fee, on both FSLs and VSLs.

At present, FSLs are offered only in USD.

For a detailed comparison of an FSL and a VSL, please see Fact Sheet—Sovereign-Backed Financing.

AIIB offered Borrowers a one-time switch from FSL to VSL for a period of one year from the introduction of the VSL product in July 2019. At present, further switches between these products are not possible.

No. At present, AIIB offers only FSL and VSL products to its sovereign borrowers. However, AIIB is developing a range of other products in response to demand from its clients, and will add them to the product menu list in the future.

Sovereign-backed loans may be offered in USD, or other currencies in which AIIB can efficiently fund itself in the market. FSLs are only offered in USD. VSLs are offered in USD and other hard currencies.

Hard currencies are defined as currencies of the Group of Ten (G10)* or those included in the SDR basket (USD, EUR, GBP, JPY, CAD, CHF, SEK, and RMB). The availability of currencies is subject to market conditions, such as sufficiently deep and liquid cross-currency swap markets. At present, AIIB provides sovereign-backed loans in Euro and RMB, based on VSL terms. AIIB expects to expand this list of currencies in the future.

* Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, United Kingdom and United States (source: IMF website).