The World Bank has arranged to borrow the equivalent of about $196 million from the Deutsche Bundesbank (the Central Bank of Germany). The borrowing replaces World Bank note issues aggregating $148 million in U.S. dollars and D.M. 200 million (equal to about $48 million) now held by the Bundesbank, which are due to mature over the twelve months beginning January 16, 1961.
As evidence of its indebtedness to the Bundesbank the World Bank will issue notes dated January 16, 1961 and bearing interest at 3½%a year. The new notes will be divided as follows: $75 million of U.S. dollar notes and D.M. 100 million of Deutsche Mark notes maturing on August 1, 1964; and $73 million of U.S. dollar notes and D.M. 100 million of Deutsche Mark notes maturing on February 1, 1965.
The average maturity of the new notes is three years and ten months. The issues to be retired have an average remaining maturity of seven months. Commenting on this transaction, Eugene R. Black, President of the World Bank, expressed his appreciation of this "further indication of cooperation by the Federal Republic of West Germany and the Bundesbank in the financing of the activities of the World Bank. 11 Mr. Black pointed out that the Deutsche Bundesbank has lent $591 million net in dollars and Deutsche Mark to the World Bank, equal to more than 25% of the World Bank's outstanding indebtedness.