The Inter-American Development Bank is joining the brave new world of political risk insurance for the capital markets. Long known for its A/B-loan product designed to promote private sector projects in Latin America, the agency is now putting the final touches to an extension of political risk guarantees.

"Last February, our mandate was broadened to include helping to develop local capital markets," said Bernardo Friedman, deputy manager at the IDB. "And we thought that a good way to do so would be through a political risk product that would bring Latin fixed-income transactions up to investment grade."

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