Instead of calling it “quiet,” we might say it’s a somewhat misunderstood transformation due to its technicalities. But the key lies in the originate-to-share scheme, where major investors like Newmarket participate in response to the lack of engagement from member countries.
In October 2024, a short article in Financial Times announced that the Inter-American Development Bank (IDB)—the largest development bank in Latin America, based in Washington DC—was seeking to transfer part of the risk of its loans, totaling $1 billion, to a group of private investors, and the first investor was Newmarket, an asset management group that took on $70 million of default risk.
They are a Pennsylvania-investment adviser, targeting investments in structured opportunities sourced from a global network of banks and financial institutions.
This was part of an initiative that had been announced throughout the beginning of that year in investor meetings held across the globe, from Mexico City to Tokyo.
The effort aimed at securing financing in multilateral organizations in DC is a generalized spirit, where even “big players like BlackRock can find an attractive place to put their millions to work,” as stated by World Bank President Ajay Banga a year earlier during the UN’s COP28.
The purpose is to free up the IDB’s own capital from complications so it can issue new loans, allowing money to reach more development projects without needing to increase its funding base.
In doing so, the organization reduces its risk exposure, eases its ongoing need for new resources, and attracts private investors—thus diversifying its sources of financing.
Moreover, involving the private sector is also intended to improve project effectiveness and efficiency, without abandoning the global pressure for climate-focused and socially-oriented investments, in line with development goals.
The agreement is similar to one executed by Newmarket in 2020 with the African Development Bank (AfDB), but it is the first of its kind at this scale for Latin America, setting a significant precedent for the region.
This operation is innovative because development banks have traditionally not relied on market mechanisms to manage risk; instead, they depend on public funding from governments—governments that are increasingly reluctant to reach into their pockets for multilateral organizations, a sentiment echoed in every spot of DC.
The transaction includes asset securitization, an innovative method where loans are converted into tradable securities. In other words, illiquid assets (like mortgages or invoices) are transformed into tradable financial instruments.
Large private investors take on part of the default risk in exchange for returns.
For the IDB, this is not just about raising funds for projects, but about acting as a catalyst for broader financing.
It’s a bold move, undoubtedly, although not without controversy, especially from expert voices in Latin America, which has traditionally been wary of the most powerful players in global finance.
Nonetheless, things are moving forward. The originate-to-share model and the issuance of notes show that the IDB is already shifting capital toward investors instead of holding it, optimizing its balance sheet and expanding its reach.
For instance, in March 2025, the IDB issued $50 million in callable 15-year notes, aimed at institutional investors in international capital markets.
The organization has solid experience in deploying this type of instrument, and there are clear examples of how they can be applied, such as its partnership with ImpactA, a pioneering impact investment firm focused on tailored financing solutions for energy, sustainable mobility, sanitation, and healthcare.
According to the IDB’s own platform, in April 2025, of the $30 million involved with the firm, $25 million came from IDB Invest’s own resources, while $5 million were contributed by the United Kingdom’s Sustainable Infrastructure Program (UK SIP) through a blended finance scheme, thus offering protection against first-loss risk.
In other words, this is a clear example of risk diversification through various financial instruments.
Taken together, these actions reveal a structural shift—from playing a traditional lending role to leading initiatives aimed at massive mobilization of private capital, a critical component for sustainable development in Latin America.
This evolution—which, in hindsight, seemed inevitable—reflects the IDB’s commitment to leveraging financial markets to secure resources for high-impact initiatives in the region, all while maintaining its AAA credit rating from agencies such as S&P Global Ratings and Fitch Ratings.
This is a transformation cautiously unveiled to a broad audience, which could, perhaps in the future, pave the way for a new -more private- model of international financing.
