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PRESS RELEASE October 1, 2008

USD 1.5 Billion 5-year World Bank Global Bond

Washington, DC, October 1, 2008 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) launched today a USD 1.5 billion global bond issue, its first USD benchmark since March 2006.

This transaction responds to global investor demand for the highest quality fixed-income investments, against the backdrop of extreme market volatility, wider swap spreads, and an overall flight to quality.

“The past several months have been a particularly difficult period in international finance.  This deal shows that – given the right opportunity – issuers, bankers and investors can begin to rebuild a continuous and liquid market for term finance,” said World Bank Treasurer Kenneth Lay.

The bond pays a coupon of 3.5% and has a maturity of 5 years – longer than market participants believed, and recent transactions have suggested, was generally available to even highly-rated issuers.  The breadth and diversity of the order book suggests that many investors have seen the transaction as a welcome opportunity to rebuild the intermediate-maturity segment of their fixed-income portfolios.

The present transaction is consistent with the World Bank’s long-standing practice of deploying its franchise as an issuer in the international capital markets to offer liquid, well-priced instruments in times of market stress. This approach has direct benefits for World Bank member countries, as well, since this cooperative institution is able to fund its activities as a provider of financial services for its members on highly attractive terms.  In this instance, it has achieved the most attractive LIBOR-equivalent funding level for any World Bank public benchmark issued to date.

The transaction was announced at approximately 8:00 a.m. UK time, following positive feedback from key investors overnight.  The book quickly built to approximately USD 500 million within the first hour, and closed oversubscribed at USD 1.8 billion within just seven hours. While central bank and other official institutions played a key role, the order book was well diversified both geographically and by investor type. The high quality distribution will ensure a positive secondary market performance for the bonds.

This transaction was joint-lead managed by Goldman Sachs, JP Morgan, and Morgan Stanley.

The bonds were issued at a price of 99.564% and pay a coupon of 3.5% per annum, through semiannual payments. This gives investors a yield of 3.5955% (s.a.), equivalent to a spread of +77.75 basis points above the underlying US Treasury bond. Details below:

Investor Distribution:

By Geography
Americas 26%
Asia 18%
Europe 30%
Middle East 18%
UK 08%

By Investor Type
Bank / Corporates 08%
Central Banks / Official Institutions 64%
Fund Managers 18%
Pension / Insurers 04%
Private Banks 06%

Summary Details:

Amount: USD *1.5 billion
Settlement date: October 8, 2008
Coupon: 3.5% per annum, payable semiannually
Maturity Date: October 8, 2013
Issue price: 99.564%
Spread: +77.75 basis points over the underlying US Treasury

(UST 3.125% due September 2013)
Interest payment dates: April 8, October 8
Listing: Luxembourg Stock Exchange
Form of notes: Registered, Fed Bookentry notes
Clearing systems: Fedwire, Euroclear or Clearstream

ISIN: US459056HM24

*On July 22, 2009, IBRD agreed to increase the principal amount with a second tranche in the amount of USD 150 million with an issue price of 103.673% (settlement date: August 4, 2009). On October 8, 2009, IBRD agreed to further increase the principal amount with a third tranche in the amount of USD 70 million with an issue price of 105.617% (settlement date: October 15, 2009). The new total outstanding principal amount is USD 1.720 billion.

The World Bank designed and issued the first global bond in 1989.  Information on its global bonds and other offerings for investors is on the World Bank Treasury website at: www.worldbank.org/debtsecurities.