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PRESS RELEASE May 18, 2004

The World Bank Launches Innovative Euro 50 Million Target Redemption Note

Washington, DC, May 18, 2004 - The World Bank launched a Euro 50 Million target redemption note today. The bond pays a 4.5% coupon for the first year, and one further coupon of 4.5%, the timing of which depends on the exchange rate of the Euro versus the USD on a specified date (see details below). Once the second coupon is paid, the investor also receives the full amount of principal back.

The bond was issued to provide Italian institutional and retail investors with an innovative structure with limited risk - in the worst case scenario, the internal rate of return will be 1.8% p.a. for a 5-year investment, in the best case, it will be 4.5% p.a. for a two-year investment - offered by a high quality issuer.

The lead managers were Abaxbank SpA and MedioBanca SpA.

Amount: EUR 50 million
Settlement date: June 28, 2004
Maturity Date: June 28, 2009 (if the bond is not redeemed earlier)
Coupon Rate: Year 1: 4.50% p.a.; Years 2-4: 4.50% p.a. if the EUR/USD rate 15 business days prior to the relevant coupon payment date, is below 1.02; otherwise 0%; Year 5: 4.50% p.a.
Redemption Date: The note will automatically be redeemed in full on a coupon payment date on which the cumulative interest amount reaches 9% of the principal amount on a non-compounded basis. 
Denomination: EUR 1,000
Listing: None
Clearing Systems: Euroclear or Clearstream
ISIN Code: XS0193633848

The World Bank's bond products and investor presentation can be accessed through the website of the World Bank for bond investors ( For a list of selected bonds issued recently by the World Bank, see: List of Selected Recent World Bank Bonds.