The longest maturity of any borrowing ever made by the World Bank – a 99-year private placement in Canada of Floating Rate Notes (FRN’s) totaling Can$ 100 million (about US$76 million) – was announced today by the Bank.
The previous longest maturity of a World Bank issue was 30 years.
The placement also represented the first FRN borrowing in Canada by the Bank. Like its previous two FRNs, which were US dollar borrowings, this issue uses a Treasury-bill rate rather than LIBOR (the London Inter-Bank Offered Rate) as the pricing benchmark. The interest rate will be 45 basis points (hundredths of one percent) over the 91-day Canadian Treasury-bill rate. Interest will be payable monthly and re-set monthly on the basis of the latest Canadian Treasury-bill tender.
The borrowing is callable at par by the Bank in whole or in part on January 1, 1990, and on any later interest payment date.
The Bank today entered into a purchase agreement for the issue with a group of Canadian investment banks led by Dominion Securities Pitfield Limited in association with Wood Gundy, Inc., and McLeod Young Weir Limited in Toronto. The proceeds of the issue will be used to help finance the general operations of the World Bank.