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PRESS RELEASE October 9, 1952

World Bank Announces New $60 Million Bond Issue

The following announcement was made today in New York City by the First Boston Corporation and Morgan Stanley & Co.:

The International Bank for Reconstruction and Development, better known as the World Bank, is bringing to the American investment market today (October 9) a new issue of $60,000,000 3½% bonds due October 15, 1971. Priced at 98% plus accrued interest to yield approximately 3.65% to maturity, the dollar bonds are being offered publicly by a nationwide group of 139 banks and investment firms headed by The First Boston Corporation and Morgan Stanley & Co.

The aggregate principal amount of the six bond issues sold previously by the Bank in the United States, since the initial offering in 1947, is $550,000,000. The current financing is the second to be undertaken in this country on a negotiated underwriting basis. In May 1952, an issue of $50,000,000 3-3/8% bonds was successfully sold through a group of 119 banks and investment firms headed by Morgan Stan1ey & Co. and The First Boston Corporation. Of the other offerings, one issue was sold on a nationwide agency basis, another was sold by competitive bidding, and two issues were sold on a sponsorship basis. In addition, the Bank has sold one issue each in England and Canada and three in Switzerland.

Sinking fund provisions on the new bonds, calling for the retirement of $2,000,000 of bonds on or before October 15, 1957 and in each year thereafter to and including 1966, and $2,500,000 in each of the years 1967 to 1970, are calculated to retire 50 per cent of the issue prior to maturity. The bonds are redeemable for the sinking fund at 100 per cent. General redemption prices range from 101½% if redeemed on or before October 15, 1957, to 100% after October 15, 1966.

Proceeds from the sale of new bonds will be used in the general operations of the Bank. Up to Jun 30, 1952, the Bank had entered into loan commitments in an aggregate principal amount equivalent to $1,412,000,000 to finance programs or projects in 27 countries. Expressed in U.S. dollar equivalents, loans have been made for the following purposes: electric power, $389,300,000; transportation and communications, $319,500,000; agriculture and forestry, 143,700,000; industry, $559,500,000. The Bank has also furnished to member countries, both in connection with and independently of loan applications, technical assistance for surveys of development possibilities and assistance in analyzing their fiscal and economic problems.

The Bank, which began operations in 1946, is an institution whose members are governments. At present, fifty-four governments are members. Its principal purposes are: (A) to assist 1n the reconstruction and development of its member countries by facilitating the investment of capital for productive purposes, thereby promoting the long-range growth of international trade and the improvement of standards of living; (B) to promote private foreign investment by guarantees of and participations in loans and other investments made by private investors; and (C) when private capital is not available on reasonable terms, to make loans for productive purposes out of its own resources or funds borrowed by it

From June 25, 1946, when the Bank began operations, to June 30, 1952, the Bank’s net income from operations amounted to the equivalent of $58,028,100 which has been allocated to a general reserve against losses on loans and guarantees.

Membership in the Bank carries an obligation on the part of individual members to subscribe to shares of the Bank’s capital stock. Of an authorized 100,000 shares, each share having a par value of $100,000, there are currently outstanding 90,365 shares. The United States has a total subscription of $3,175,000,000, or 31,750 shares, of which $2,540,000,000 remains subject to call, and is entitled to cast approximately 31% of the total votes of all present members.

The underwriting group includes among others: The First Boston Corporation, Morgan Stanley & Co., the National City Bank of New York, J. P. Morgan & Co., Incorporated, The Chase National Bank of The City of New York, Bankers Trust Company, The First National Bank of Chicago, Guaranty Trust Company of New York, The First National Bank of the City of New York, Manufacturers Trust Company, Chemical Bank & Trust Company, Bank of America, N. T. & S.A., Blyth & Co., Inc., Drexel & Co., Glore, Forgan & Co., Goldman, Sachs & Co., Harriman Ripley & Co., Incorporated, Kidder Peabody & Co., Lazard Frere a & Co., Lehman Brothers, Merrill Lynch, Pierce, Fenner & Beane, Salomon Bros. & Hutzler., Shields & Company, Smith, Barney & Co., Stone & Webster Securities Corporation, Onion Securities Corporation, White, Weld & Co.