The International Bank for Reconstruction and Development (the World Bank) announced today that it has successfully concluded its borrowing program in public and private markets for fiscal year 1978, almost six months ahead of schedule. The Bank said that it has borrowed more than $3.7 bi11ion. There remain only two schedu1ed refinancing operations with Central Banks to reach the World Bank's program of $4.2 billion for the fiscal year which ends on June 30, 1978.
The operations attributed to FY 1978 comprised 29 issues publicly offered or privately placed by the Bank throughout the world.
Of these, 12 issues were sold through public bond or note issues totaling the equivalent of $2,172 million, or 58% of the funds raised. Eleven private placements totaling $826 million, or about 22% of total funds raised, were completed. The balance of $742 million, or 20% of the borrowings, was done through six direct placements with governments or Central Banks.
The United States market was the largest supplier of funds; six issues aggregating $1,350 million were offered and sold in two public offerings in the United States.
Two public issues providing DM 800 million (about $363 million) were sold in Germany. The most recent in January 1978 was for DM 500 million representing the World Bank's largest public issue in the German market. In addition to its public issues in Germany, the Bank made seven private placements, primarily with or through institutions in the savings and cooperative bank sectors in Germany, for DM 1.2 billion ($531 million), for a total of $894 million in Germany.
In August 1977 the Bank returned to the Japanese domestic market for the first time since 1973 with a ¥30 billion domestic issue and at the same time issued ¥20 bi11ion seven-year bonds in the Euromarket. These issues were followed, in December, by a ¥50 billion offering in the Japanese domestic market -- the largest issue by a non-resident borrower offered in Japan. In all, Japanese yen borrowings totaled ¥100,000 million ($392 million).
The Bank made one public issue in Switzerland for SwF 150 million (about $67 million) and four private placements aggregating SwF 675 Million ($296 Million), For A Total Of $363 Million In Switzerland.
The World Bank's direct placements with Central Banks included two operations with the Deutsche Bundesbank amounting to DM 500 million ($226 million); one placement for ¥30,000 million ($117 million) with The Bank of Japan; one placement of Netherland guilders 100 million ($40 million) with the Central Bank of Libya; and a sale of $350 million two-year bonds. For the balance of the fiscal year, the Bank has scheduled the refinancing of another $350 million two-year issue to Central Banks in March 1978 and a refinancing operation for ¥30 billion in April with The Bank of Japan.
The Bank's borrowing costs for the period, weighted by the amount of the issues, average 6.83%. The average life of the $3.7 billion was 8.9 years. The average cost of all $22 billion of outstanding debt of the World Bank at January 31, 1978 was 7.4 %. The average cost of all Bank resources, including paid-in capital and accumulated earnings, was 6.0% at the same date. The realized rate of return on the Bank's average liquid resources of $&.9 billion for the period July 1, 1977 to January 31, 1978 was 6.85% and its lending rate on January 31 was 7.45%.
Shortly before the beginning of the fiscal year, the Bank's authorized capital was increased by $8.4 billion to $41 billion in terms of current US dollars. Of the 125 members for whom increases have been authorized, applications for additional shares totaling about $2 billion had been received from 23 members by January 31, 1978. Governments may take up their additional authorized subscriptions at any time prior to October 1, 1980.