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World Bank's Global USD Bond Increased to USD 4 Billion

Washington, DC, March 29, 2001 – In response to very strong demand from investors for the World Bank's recently issued $3.5 billion 5-year 5% global bonds, the World Bank re-opened the issue and increased it to $4 billion. That makes it equal in size to the largest bond ever issued by the World Bank.

Today's re-opening was joint lead-managed by HSBC, Morgan Stanley, and UBS Warburg, who jointly lead-managed the original tranche. The secondary market performance continues to be strong and is benefiting from the high liquidity of the issue.

World Bank Launches Its First Global USD Bond in FY 2001

Washington, DC, March 23, 2001 – The World Bank launched a $3 billion 5-year global bond on Wednesday, March 21, which was increased to $3.5 billion on the following day. The transaction met strong demand from investors, who have recently been hit by weakness in global equity and corporate bond markets.

The 50 b.p. cut by the Federal Reserve on Tuesday provided a strong USD market undertone, and the transaction was oversubscribed by over 40%. Although the Bank increased the size of the issue by USD 500 million, by the close of business yesterday, the total order book continued to substantially exceed the supply.

The bonds have a final maturity of March 28, 2006 and were priced at a yield spread of 62 basis points over the 5.75% US Treasury due November 2005, providing investors with a yield of over 5% on a semi-annual basis.

The transaction was joint lead-managed by HSBC, Morgan Stanley, and UBS Warburg which took 88% of the bonds. The balance was syndicated to the following 11 co-managers: CSFB, Daiwa, Goldman Sachs, Merrill Lynch, Mizuho Securities, Nomura, RBC Dominion, Salomon Smith Barney, Sanwa, Tokyo-Mitsubishi, and Charles Schwab.

Forty percent of the issue was placed with accounts in North America with the remainder evenly split between Europe and Asia. The distribution among investor types was: 40% fund managers; 35% central banks and government entities; 10% banks, 8% Insurance 7% others (pension funds, retail buyers and corporate).

The issue tightened in the secondary market by about 1 b.p relative to the yield of the underlying US treasury and comparable benchmark notes.

"We have been looking at the market closely since December, and decided to launch the transaction after reviewing the impact of Fed's decision on the USD bond markets. The rallying bond market provided an excellent opportunity for a five year transaction given other supply in the market. We are very pleased with the quality and breadth of the accounts," said C.K. Teng, Lead Specialist for Capital Markets at the World Bank.

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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