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PRESS RELEASE October 15, 1957

World Bank Offers $75 Million 23-Year Bond Issue

“Public offering of a new issue of $75,000,000 International Bank of Reconstruction and Development (World Bank) 4-3/4% Twenty-Three Year Bonds of 1957, due November 1, 1980, is being made today (October 15) by a nationwide underwriting group of 164 investment firms and banks managed jointly by Morgan Stanley & Co. and The First Boston Corporation. The bonds are priced at 100% ad accrued interest.

“The new bonds will not be callable before November 1, 1967. On and after that date they will be callable at the election of the Bank at prices ranging from 103% and accrued interest if redeemed on or before October 31, 1971, down to 100% after October 31, 1977.

“During the period February 1958 and through 1967, a purchase fund will be in operation. 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 $3,750,000 principal amount after all bonds, including bonds sold on a delayed delivery basis, are issued. The rate will be proportionately less before then.

“In addition to the purchase fund a sinking fund has been provided, calculated to retire 50% of the issue prior to maturity, at the rate of $3,000,000 annually beginning in 1968 to and including 1979, and $1,500,000 on or prior to May 1, 1980. The sinking fund redemption price is 100%.

"As in the two most recent issues by the Bank in the United States, arrangements have been made for the 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 installments on one or more quarterly dates from February 1, 1958 through November 1, 1960. A commitment fee of 3/4% a year will be paid by the Bank to purchasers under delayed delivery contracts.

"The delayed delivery arrangement, as in the past, is expected to enable to Bank to coordinate a portion of its borrowing with its loan disbursements; and to make it possible for purchasers to arrange their payments to suit their projected cash positions.

"This is the seventh issue of World Bank bonds to be marketed in the United States on a negotiated basis by underwriting groups managed jointly by Morgan Stanley & Co. and The First Boston Corporation and the third issue to be placed this year. In January the Bank sold $100,000,000 Twenty Year 4-1/2% bonds, followed by the sale of an equal amount of Twenty-One Year 4-1/4´s in April.

“As of June 30, 1957, the Bank had outstanding bonds and notes aggregating $1,034,000,000. After giving effect to the present issue, to the sale of $100,000,000 4-1/4% notes to the Deutsche Bundesbank in July, and to delivery of bonds under delayed delivery contracts, this figure is increased to $1,252,000, including United States dollar bonds aggregating $1,052,000,000 and Swiss franc, Canadian dollar, Sterling and Netherlands guilder obligations aggregating $200,000,000. In addition to the above issues, the Bank has agreed to sell to the Deutsche Bundesbank $75,000,000 of 4-3/8% United States dollar notes due in three equal annual installments on January 16., 1959, 1960, and 1961. These notes are to be delivered to the Bundesbank against payment on October 17, 1957.”

 


PRESS RELEASE NO: 508

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