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          k Press Re lease No. 66/30/Rn.
       3.311                                             Subject:      World Bank Bond Isaue Planned
       June 13, 1966

                 The following news release is being issued in New York today by The First

        Boston Corporation and Morgan Stanley & Co.:
                 "George D. Woods, President of the International Bank for Reconstruction and

       Development, announced today that the Bank is planning to offer in the United States

       during the week beginning June 27, 1966, a new issue of $175,000,000 principal

       amount of Twenty-Five Year Bonds due July 1, 1991.             The Bonds, which are non-cal.lable

       for a period of ten years, will be offered through a nationwide g~oup of under-

       writers headed by The First Boston Corporation and Morgan Stanley                  &   Co.   The

•      coupon and price of the Bonds will be determined just prior to the offering.

       fhis is the first World Bank Bond issue in the United States since January, 1965.

                "In order to enter any capital market, the Bank, under its Articles of Agree-

       ~ent, must have the approval of the government concerned.                 In a letter granting

       rte United Stat es Go\-'ernment 's apr,;roval of the forthcoming issue, Secretary of

       the Treasury Fowler stated that the Bank has made an outstanding contribution to

       the sound economic advance of the :ess developed countries.                 The Secretary said

       further that he a~proves of the proposed borrowing because the activit:f.es of the

       r.~nk coincide with the national interests of the United States in tnis area.

                "The Bonds to be offered are not subject to the Interest Eqt!alization Tax.

       Furthermore; the 1966 o Guidelines for Non-Bank Financial Institutions, 1 issued

       t~, the Federal Reserve System in December, 1965, place no restraint on purchases



•      <,f World Bank Bonds.      Thus no guideline restrictions affect purchases by non-bank

       flu:incial institutions, including trust companies or trust departments of conuner-

       <:'"id    banks.
                                         - 2 -
       "In order to cooperate with the President's balance of payments program, the     •

ilo~ld Bank intends to invest in the United States the proceeds from the sale of

these Bonds to U.S. investors, so as to eliminate any effect on the U.S. balance

of payments until the end of 1967.

       "The Bonds will not be callable prior to July 1, 1976, ten years from the

date of issue.     A sinking fund beginning in 1977 will retire 50 percent of the

issue prior to maturity.     The Bonds ~ill be in fully registered form without

coupons.
       "In addition to the initial delivery of the Bonds, which is expected on

July 13, 1966, Bonds will also be offered for sale on a delayed delivery basis,

through the underwriters, to certain institutional purchasers.     Delayed delivery

sales will be made under contracts between the World Bank and the purchasers fc"':



                                                                                        •
settlement on October 5, 1966, January 4, 1967, July 5, 1967 and January 3, 1968 •

       "The First Boston Corporation and Morgan Stanley & Co. are reserving a portion

of the proposed issue for sale to new United States and Canadian institutional

investors in the Bank's Bonds.    Qualified institutional purchasers who have not

purchased World Bank Bonds since April, 1952, will be allotted Bonds from this

~pecial reserve.

       "The International Bank for Reconstruction and Development is an international

instituti.on, the members of which are governments now numbering 103.    The Bank

cfficially began operations on June 25, 1946 and has its main office in Washington,

n.c.
       "Its principal purpose is to assist the economic development of its member

cou11tries by facilitat.ing the investment of capital for pr~ductive purposes, there-

by   promoting the long-range growth of international trade and the improvement of

standards of iiving.    When private capital is not available on reasonable tenM,       •

the Bank supplements private investment by making loans out of its own resources

or funds borrowed by it."