“Public offering of a new issue of $100,000,000 International Bank for Reconstruction and Development (World Bank) 4½%Tw Twenty Year Bonds of 19.57, due January 1, 1977, is being made today (January 10) by a nationwide underwriting group comprising 161 investment firms and banks managed jointly by Morgan Stanley & Co. and The First Boston Corporation. The bonds are to be priced at 100 percent and accrued interest.
“Several features have been incorporated in the new offering that are designed to meet current market conditions and the operating practices of the World Bank. Arrangements have been made for sale of bonds for delayed delivery to certain institutional investors. Such sales will be at the public offering price and deliveries will be made under contracts between the Bank and the purchasers providing for deliveries in instalments on one or more quarterly dates from April l, 1957 through October 1, 1959. A commitment fee of 3/4% a year will be paid by the Bank to purchasers under delayed delivery contracts. Payments will cover the period from January 22, 1957 to date of delivery and will be made to purchasers on delivery.
"This provision enables institutional investors in agreement with the Bank to arrange their purchases of the new issue in the light of their projected cash position. The World Bank, on the other hand, whose disbursements on loans usually extend over a period of several years is enabled to coordinate a portion of its borrowings with its disbursements.
"The new bonds will not be redeemable before January 1, 1967. On and after that date they will be redeemable at the election of the Bank at prices ranging from 103% and accrued interest if redeemed on or before January 1, 1970, down to 100% if redemption is after January 1, 1975.
“During the ten-year period 1957-66, when the bonds are not redeemable, a purchase fund will be in operation, commencing April 1, 1957 and continuing through 1966. The fund, which is non-cumulative from year to year, provides for the purchase of bonds in the open market or by acceptance of tenders at prices up to and including 100% and accrued interest. It will be at an annual rate of $5,000,000 principal amount after all bonds, including bonds sold on a delayed delivery basis, are issued. The rate will be proportionately less before then.
"A mandatory sinking fund has been provided and will start to operate in 1967. It is in addition to the purchase fund and requires the Bank to retire $5,000,000 principal amount of the bonds on or before July 1, 1967 and nor before July 1 in each year thereafter to and including 1976. Redemption prices for sinking fund purposes will be in each case at 100% and accrued interest.”
