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7-year World Bank US$1 Billion Global Notes


Washington, DC, August 5, 2002 - The World Bank launched at the opening of business in Asian markets this morning a new US$1 billion issue of seven-year bullet-maturity. The securities were priced around 9am NY time and are being offered to investors worldwide.

As registered Fed Bookentry notes, they will be eligible for clearing through the major clearing systems - Euroclear and Clearstream in Europe, and Fedwire in the US. The issue is being underwritten and distributed in its entirety by Dresdner Kleinwort Wasserstein and HSBC.

Settlement date: August 12, 2002
Coupon: 4.125% per annum
Original maturity: 7 years
Issue price: 99.91%
Spread: 97 basis points over the 5-year US Treasury
Interest payment dates: February 12, August 12
Listing: Luxembourg
Form of notes: Registered, Fed Bookentry notes
Clearing systems: Fedwire, Euroclear or Clearstream
ISIN: US45905UCG76
CUSIP: 45905UCG7

For the World Bank, the new issue is a further element in its long-standing strategy of matching the timing, volume, and terms of its issuance as closely as possible to the asset preferences of its investors. This is made possible by the World Bank's financial flexibility – especially its liquid reserves portfolio (US$24 billion at June 30, 2002).

Commenting on the new transaction, Kenneth Lay, deputy treasurer and director of the World Bank's Banking, Capital Markets and Financial Engineering Department, noted "This deal is the product of exactly the kind of relationship we like to have with investors and the Street. Important clients – including especially the central bank reserves management community – needed high-quality paper at this maturity and expressed their interest. Our underwriters were listening, both to them and to us, and this deal materialized. It's a global in exactly the sense in which we've intended it – sold at issue where there's greatest investor demand, but structured to flow with as little friction as possible into other hands as demand patterns evolve."

The custody, clearing and settlement arrangements for the new issue are in the "global" format pioneered by the World Bank in the fall of 1989. The World Bank's major objective in utilizing the global format is to offer investors greater liquidity over the life of the issue by ensuring that the bonds are eligible and convenient for purchase by the broadest possible pool of investors in each of the major fixed income markets. Given the relatively low up-front cost of including this feature, especially when contrasted with the long-term benefits in greater potential liquidity and reduced transaction costs for investors, it is the World Bank's policy to utilize this format in as many of its issues as feasible.

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