World Bank Vice President and Treasurer Donald Roth announced today a new short-term borrowing program in Swiss francs. The World Bank instrument is called "COPS" Continuously Offered Payment-rights in Swiss francs.
The World Bank will offer COPS on a daily basis in minimum denominations of SwF 100,000, primarily for short-term maturities of 1, 3 and 6 months. The offers will be made 'through the Swiss Bank Corporation which initially will be the sole agent for the program.
COPS will be offered in Switzerland and governed by Swiss law. They will be issued in a format based on that used by the Swiss Confederation for its own issues of short-term obligations. Accordingly, COPS will not be classified as a security and thus will not be subject to Swiss stamp duty. Because they will be issued by a non-resident institution, COPS also will be exempt from withholding tax.
Mr. Roth said these short-term borrowings would be a complement to, rather than a substitute for, World Bank medium- and long-term borrowings in the Swiss franc market. Until now the World Bank's short-term borrowings, which account for 5 percent of its total debt, have been denominated exclusively in U.S. dollars. Short-term plus variable rate borrowings by the Bank account for about 7 percent of total debt.
The principal amount of the Bank's outstanding Swiss franc borrowings is currently SwF 17.5 billion before swaps (about US$11.6 billion).