Multilateral Development Banks (MDB`s) are global institutions, for example the World Bank and Asian Development Bank, which gather capital to provide loans for developing nations at favorable interest rates. The aim is to improve social and physical infrastructure. The urgent need to tackle world poverty has spurred the creation of suitable institutions that facilitate global progress. The MDB bond market was born.
The bottom line
MDB bonds are top-rated (AAA), and offer higher yields than similar maturity US sovereign debt. MDB bonds form a sustainable and diversified alternative to classical government bonds within a portfolio.