The International Bank for Reconstruction and Development today announced the sale of $549,000 of bonds of Corporacion de Fomento de la Produccion of Chile to the National City Bank of New York. The bonds had been received by the International Bank in connection with a loan of $2,500,000 made March 25, l948 to Fomento for the purchase of agricultural equipment. They are guaranteed by the Chilean Government and by the International Bank.
Under a recent regu1ation of the Chilean Superintendent of Banks, commercial banks in Chile may invest in bonds of this character delivered to the International Bank under loan agreements between the International Bank and any borrower in Chile. Purchase of the Fomento bonds by the National City Bank followed a decision by that bank to expand the capital of its branch in Santiago. In Chile the amount of deposits a commercial bank may hold is related to the amount of the bank’s capital.
Eugene R. Black, President of the International Bank, expressed gratification for Chile's cooperation in permitting commercial banks there to make purchases of Chilean bonds issued to the International Bank.
The sale of the Fomento bonds brings the total of obligations sold by the International Dank from its investment portfolio to $29,897,638. Fomento, an instrumentality of the Chilean government, was created to promote Chilean economic development. The bonds were sold to the National City Bank at a premium. They mature as follows: $241,000 on July l, 1951, $200,000 on January 1, 1952, and $108,000 on July 1, 1952.