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PRESS RELEASE September 25, 1956

World Bank Sells $75 Million 2-Year Bond Issue to Investors

The International Bank for Reconstruction and Development has arranged to sell at par a $75 million issue of its United States dollar bonds by private placement entirely outside the United States.

President Eugene R. Black, speaking at the Annual Meeting of the Bank's Board of Governors, now in session in Washington, D.C., announced this morning that arrangements for the issue had been completed. Subscriptions closed yesterday (September 24, 1956); the aggregate of allotments to subscribers was limited to a principal amount of $75 million.

“The issue is being bought by investors in 22 countries,” Mr. Black said. Purchasers include central banks, special government accounts, commercial banks, insurance companies and private corporations. “The transaction” Mr. Black observed, “gives a continuing demonstration of the wide international base on which the Bank is able to conduct its financial operations”.

The new bonds will be known as the "Two-Year Bond of 1956.” Interest is at 3½% a year, payable semi-annually beginning April 1, 1957. The issue is dated October 1, 1956 and matures October 1, 1958. It is the second private placement of dollar bonds of the Bank with investors outside the United States. In September 1954, $50 million of Five-Year dollar bonds were placed in twenty-three countries.

A large share of the new issue will be taken by the investors outside the United States who hold the major part of the $75 million issue of 3% three-year bonds which mature on October 1, 1956. Requests from many of these investors that the Bank provide them an opportunity to re-invest the proceeds of the maturing issue was influential in the Bank's decision to issue the new securities.

The total of outstanding bonds of the Bank will remain $850 million --$695 million of United States dollar bonds and the equivalent of $155 million in Canadian dollar, Netherland Guilder, Sterling and Swiss franc bonds.

 It is estimated that when distribution of the new issue is completed, holdings of dollar and non-dollar bonds of the Bank outside of the United States will amount to the equivalent of approximately $405 million, or over 47% of the total outstanding. Included in holdings abroad will be roughly $250 million of the Bank's United States dollar bonds, equal to more 36% of outstanding dollar issues.

 


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