PROJECTS FOR COMMENT
- There are no projects for comment at this moment
The original authorized capital of NADB is US$3 billion with equal commitments from the United States and Mexico. Each country authorized the subscription of 150,000 shares of the bank’s capital stock with a par value of $10,000 per share. Fifteen percent (US$450 million) of the authorized capital is in the form of paid-in capital and the remaining 85 percent (US$2.55 billion) is in the form of callable capital.
Paid-in capital consists of cash funds contributed to NADB by the two governments and is invested in short- to medium-term, high quality, fixed-income securities.
Callable capital does not represent actual cash funds contributed to NADB by the two governments. It is composed of funds that are pledged to be provided to NADB from the two countries only if required to meet the bank’s obligations on borrowings of funds for inclusion in its capital resources as specified in the Charter. In other words, callable capital is essentially a guaranty for any bonds issued by the bank to raise funds in the capital markets for its lending program. Because no actual cash funds are received, callable capital may not be used to make loans directly.
As set forth in its charter, 90 percent of the original capital subscription is used to finance environmental infrastructure projects in the border region, and the remaining 10 percent of the capital subscribed by each country went to finance community adjustment and investment throughout the United States and Mexico in support of the purposes of the North American Free Trade Agreement (NAFTA) (the “Domestic Programs”). Consequently, of the US$450 million in paid-in capital, US$405 million relates to the environmental infrastructure program, while the remaining US$45 million was evenly divided between the two countries with each receiving US$22.5 million for their respective domestic program.
During 2016, the U.S. and Mexican Governments each subscribed an additional 150,000 shares of capital stock with a par value of US$10,000 per share, subject to the necessary legal requirements and availability of appropriations of the subscribing country. The additional capital is classified as 45,000 paid-in shares or US$450 million and 255,000 callable shares or US$2.55 billion. The subscription of members to paid-in and callable capital shall be in several installments, effective on or before December 31, 2016 through December 31, 2022 or such later dates as the Board of Directors shall determine.
In September 2016, Mexico made its first contribution of additional capital of US$10 million, representing 1,000 paid-in shares, along with its commitment of the associated 5,666.67 in callable shares (US$56.67 million).
To date, NADB has US$415 million in paid-in-capital, along with 2.35 billion in callable capital.