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PRESS RELEASE July 20, 2007

World Bank Issues Inaugural New Zealand Dollar-denominated Kauri Global Bond

Washington, DC, July 20, 2007 – The World Bank (International Bank for Reconstruction and Development, IBRD) rated Aaa/AAA has issued its inaugural New Zealand Dollar Kauri (“Kauri”) 7-year global bond today. The NZD 350 million bond is a syndicated transaction lead-managed by ANZ Institutional and TD Securities. Co-lead managers are RBC Capital Markets and Westpac Institutional Bank.

The World Bank announced the transaction on July 16, 2007. The timing of the launch follows a World Bank roadshow in New Zealand in April this year. It also follows the announcement by the Reserve Bank of New Zealand on July 17, 2007 of its decision to accept Supranational, Foreign Sovereign, “Agencies” and Semi-Government issues as security in the Overnight Reverse Repo Facility. 

The transaction was very well received with the majority of the investor participation from domestic accounts, representing 83%, and primarily fund managers and insurance companies.

With this bond, the World Bank becomes the first supranational issuer in the Kauri market since it was established in 2004. The World Bank previously issued the first ever global NZD bond in 1990, and it is delighted to come back to this market.

Summary terms and conditions for the new Kauri* issue

Amount: NZD 350 million
Settlement date: July 30, 2007
Maturity date: July 30, 2014
Issue / re-offer price: 99.092275%
Yield: 7.67% semi-annual (NZGB Apr 2015 + 67 basis points)
Coupon: 7.50% % semi-annual
Denomination: NZ$1,000 and multiples thereof; within New Zealand, NZ$500,000 minimum with multiples of NZ$100,000 thereafter
Format: Registered notes
Listing: Luxembourg 
Clearing systems: Austraclear NZ, Euroclear and Clearstream

*A Kauri bond is a bond issued by a foreign issuer in the New Zealand domestic market

“We received positive feedback from investors during our visits in April about a potential World Bank New Zealand Dollar bond. Together with ANZ and TD, we designed this bond to closely match investors' requests. It settles through Austraclear New Zealand, and is a large, long-dated New Zealand Dollar bond. The global format also enables international investors to easily participate over the lifetime of the bond, which enhances liquidity. We are very happy about the great reception from investors, and about the successful re-entry to this market,” said Heike Reichelt, Head of Investor Relations and New Products at the World Bank.

“It is great to see the birth of a new market and whilst the Kauri sector has been alive for a couple of years, we have now witnessed the first sub-BKBM trade! This landmark deal is attractive to an even broader investor group due to recent changes in the market, with the recent Reserve Bank of New Zealand announcement heralding a wider range of securities acceptable for the overnight reverse repo facility and planned liquidity changes by the central bank. We expect the IBRD trade to be the first of a number of issues from supranational issuers in this market. Strong domestic support formed the backbone of this 7-year issue with a good cross-section of investors from the institutional sector to participation from some smaller ‘middle market’ players,” said Nick Howell, Director of Syndicate at ANZ Investment Bank.

“As the first supranational to issue a Kauri bond, the World Bank is again at the forefront of helping to establish a new market. The World Bank’s innovation demonstrates its responsiveness to investor demands and contributions to investor needs in the global debt capital markets. This successful transaction was strongly received by the investor community, specifically with regards to domestic investors in New Zealand,” said Moti Jungreis, Global Head Currency Trading and International Fixed Income at TD Securities.

The World Bank (International Bank for Reconstruction and Development, IBRD) is a global development bank owned by 185 member countries that promotes sustainable growth in low and middle-income countries with the objective of reducing poverty. The World Bank is one of the most recognized and innovative borrowers in the international capital markets. More information about the World Bank and its activities in the capital markets is available on the web at: