Placement with investors outside the United States of a $50 million issue of United States dollar bonds was announced yesterday by Eugene R. Black, President of the International Bank for Reconstruction and Development.
"Investors in twenty-three countries have purchased the bonds, and they have been accorded the widest geographical distribution of any International Bank issue," Mr. Black declared. He said, "Distribution on so broad a scale reflects the improvement in the world dollar position, as well as increasing interest on the part of foreign institutional investors in international investment. It further reflects," ' Mr. Black added, "the willingness of the Bank's member countries to cooperate with us, even to allowing the Bank to raise part of its dollar requirements in their investment markets."
The new issue which constitutes the first private placement of direct dollar obligations of the Bank, is known as the "Five-Year Bonds 1954.” Interest is at 2½1, a year, payable semi-annually on March 15 and September 15, with the first payment falling due March 15, 1955. The bonds are dated September 15, 1954 and mature on September 15, 1959. They are subject to redemption at par, either in whole or in part, on or after March 15, 1959.
The bonds are marketable, and Mr. Black revealed that currently l00½ is bid for them in the New York market.
Subscriptions amounting to approximately$ 78 million were received for the new Five -Year Bonds; and allocations of the $50 million principal amount were made to investors in the following 23 countries:
Australia Ethiopia Netherlands
Austria Finland Nicaragua
Belgium France Norway
Canada Greece South Africa
Colombia Honduras Sweden
Cuba Italy Switzerland
Denmark Japan United Kingdom
El Salvador Mexico
Investors subscribing to and purchasing the issue in those countries included commercial banks, insurance companies, other financial institutions, private corporations and special governmental accounts.
The new issue raises the total of outstanding dollar bonds of the Bank to $715 million, of which it is estimated about $220 million, or more than 30%, are held by investors abroad. Total issues of the Bank, including its non-dollar bonds, now stand at the equivalent of $851 million, of which the equivalent of $325 million, or almost 40%, are held by investors outside the United States.
"The most significant development affecting the Bank over the last twelve months," Mr. Black declared, "has been the very rapid expansion of the market for its bonds abroad. Of $225 million in dollar bonds of the Bank offered since September 1953, more than $100 million were purchased by investors outside the United States. In addition, the Bank sold five issues denominated in Swiss francs, Canadian dollars, Netherlands guilders and pounds sterling in the period, and the total of these issues aggregated more than $70 million."
Principal agents for the Bank in the transaction were Morgan Stanley & Co. and The First Boston Corporation, which have acted as managers of investment syndicates that have underwritten and distributed four of the Bank's preceding dollar issues. No underwriting or syndicate arrangements were involved in Placement of this latest issue.