The International Bank for Reconstruction and Development has arranged to borrow the equivalent of approximately $240,000,000 in U.S. dollars and deutsche marks from the Deutsche Bundesbank (the Central Bank of Germany). This is not only the largest borrowing ever undertaken by the World Bank outside the United States but is its largest borrowing anywhere since its issue of $250,000,000 of bonds in the United States in the summer of 1947. The new debt will carry interest at the rate of 4-½% per annum and will have a final maturity of 12 years.
In announcing the transaction, Mr. Eugene R. Black, President of the World Bank, said, "The willingness of Germany to lend this large amount to the World Bank is striking testimony to the desire of Germany to assist in the economic advancement of the underdeveloped areas of the world. It also gives evidence of the energy and resourcefulness of the German people. The World Bank greatly appreciates the action taken by the officials in the Bundesbank and in the Government to make this transaction possible."
In the past three years, Germany has been the major source of funds borrowed by the World Bank, supplying more than half the approximately $1,300,000,000 of net funds borrowed in that period. Giving full effect to the transaction announced today, it is estimated that about 60% of the funded debt of the World Bank is held outside the United States, by investors in more than 40 countries.