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First Hungarian Forint Bond of the World Bank


Washington, DC, June 25, 2001 – Today, the World Bank launched its debut deal in Hungarian Forint. The one-year 10 billion Hungarian Forint (HUF) issue offers investors an annual interest coupon of 9.25% and matures on July 5, 2002. Commerzbank Capital Markets (Eastern Europe) and TD Securities were joint lead managers for the bonds.

The issue was widely syndicated and very well received. It will be traded on Toronto Dominion Securities Auto Execution Electronic system (TDAX on Bloomberg), so that banks and brokers will be able to buy the securities electronically over that system.

The Hungarian Forint Eurobond Market was recently opened, and issuers have launched bonds in response to investor appetite for this Eastern European currency. The Euro-Forint market provides easier settlement for foreign investors.

"Investors have been very keen to pick-up the issuance in the new Hungarian Forint market for foreign issuers. We are pleased to offer investors the opportunity to invest in World Bank bonds in another currency. There is very strong demand for our Forint bonds coming mainly from European fund managers. Since Hungary is an applicant negotiating to join the EU in 2004, investors want to be long Forint as a convergence play. Retail investors are also increasingly buying HUF bonds directly." said Laura Burakreis-Madejski, Senior Financial Officer, Debt Capital Markets at the World Bank.

Commerzbank Capital Markets (Eastern Europe) and TD Securities are joint lead managers and joint bookrunners. Other members of the syndicate were Caboto - Gruppo Intesa BCI, Deutsche Bank, DG Bank, Dresdner Kleinwort Wasserstein, Erste Bank der Oesterreichischen Sparkassen, HypoVereinsbank, ING Barings, KBC Bank, Morgan Stanley, Raiffeisen Zentralbank, Unicredit Banca Mobiliare, and WestLB.

The issue price of the one-year bonds due July 5, 2002 was 100.595%. The issue will be listed in Luxembourg and bonds will be available in denominations of HUF 100,000 and multiples thereof.

"This Hungarian Forint bond contributes to the development of the capital markets," said Laura Burakreis-Madejski, "and most importantly, it contributes to the depth of the market. It is among the first bond issues from foreign AAA-rated issuers, since the Government of Hungary recently announced convertibility of the currency. Furthermore, this issue is the first HUF denominated bond issue joint lead managed by a regionally based bank, Commerzbank Capital Markets (Eastern Europe), located in Prague, and London-based TD Securities. Commerzbank Capital Markets (Eastern Europe) is a wholly-owned subsidiary of Commerzbank AG and has a special regional focus on trading, syndicating and selling debt securities in Hungarian Forint, Czech Koruna, Polish Zloty, and Slovak Koruna. TD Securities has a well established presence in emerging markets, and since the beginning of the year has underwritten several emerging markets issues for the World Bank, most recently bonds denominated in Polish Zloty and South African Rand."

The World Bank is a market leader in bond issuance in emerging market currencies and over the years has offered investors World Bank debt in 39 currencies, including Chilean Peso, Czech Koruna, Greek Drachma, Mexican Peso, Polish Zloty, Slovak Koruna, and South African Rand.

The World Bank's bond products and investor presentation can be accessed through the website of the World Bank for bond investors (www.worldbank.org/debtsecurities).

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