The World Bank has arranged to refund in advance of maturity notes totaling the equivalent of about $158 million held by the Deutsche Bundesbank (the Central Bank or Germany). Involved are World Bank note issues aggregating U.S. $ll0 million and D.M. 200 million (about $48 million), which were due to mature over the 18 months beginning June 20, 1962.
As evidence of its indebtedness to the Bundesbank, the World Bank will issue notes dated February 1, 1961. The new notes will be in five maturities, the first falling due on August 1, 1965; and the last on August 1, 1967.
The average maturity of the new notes is five years and six months. The issues being refunded have an average remaining maturity of two years.
The range of rates of interest on the old notes is between 4% and 4-3/4%. The new notes will carry the same range or rates until the original maturity dates are reached. Thereafter the new notes will carry a single rate of 3-3/4%.
Commenting on the transaction, Eugene R. Black, President or the World Bank, expressed his appreciation of "the continuing cooperation of the Federal Republic of Germany and the Bundesbank in financing the activities of the World Bank in the realm of economic development”. Announcement already had been made on January 18, 1961, of arrangements with the Deutsche Bundesbank to refund the equivalent of $196 million of World Bank notes, with an average remaining of seven months, into new maturities with an average life of almost four years. The net result of both transactions is that on $354 million of debt, the World Bank has extended the maturities from an average of about one year to an average of almost five years.