<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street N.W.
Washington, D.C. 20549
REPORT OF
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
In respect of its
6-5/8% U.S. Dollar Global Bonds of 1996, due August 21, 2006
Filed pursuant to Rule 3 of Regulation BW
Dated: August 21, 1996
<PAGE>
The following information regarding the 6-5/8% U.S. Dollar Global Bonds
of 1996, due August 21, 2006 (the "Bonds") of International Bank for
Reconstruction and Development is being filed pursuant to Rule 3 of
Regulation BW. As authorized by Rule 4 of Regulation BW, certain information
is to be provided in the form of a Prospectus (the "Prospectus") (Exhibit D)
and in the form of an Information Statement (the "Information Statement").
Certain information specified in Schedule A to Regulation BW is not available
at the date of this Report.
ITEM 1. DESCRIPTION OF OBLIGATIONS
(a) 6-5/8% U.S. Dollar Global Bonds of 1996, due August 21, 2006.
(b) 6-5/8%. Interest payment dates February 21 and August 21.
(c) Maturing August 21, 2006. The maturity of the Bonds may be
accelerated if the Bank shall default in the payment of the principal
of, or interest on, or in the performance of any covenant in respect
of a purchase fund or a sinking fund in any bonds (including the
Bonds), notes or similar obligations which have been issued, assumed
or guaranteed by the Bank, such default shall continue for a period of
90 days, a holder notifies the Bank that it elects to declare the
principal of Bonds held by it to be due and payable, and all such
defaults have not been cured by 30 days after such notice has been
delivered.
(d) Not applicable.
(e) Bank's standard negative pledge clause (See clause 8 on page 6 of the
Prospectus).
(f) Not applicable.
(g) No provisions have been made for the amendment or modification of the
terms of the obligations by the holders thereof or otherwise.
(h) See pages 9 and 10 of the Prospectus.
(i) Federal Reserve Bank of New York, 33 Liberty Street, New York, New
York.
ITEM 2. DISTRIBUTION OF OBLIGATIONS
As of August 14, 1996, the Bank entered into an Underwriting Agreement with
Merrill Lynch International and Swiss Bank Corporation as Representatives of the
several underwriters (the "Underwriters"). The Underwriters have agreed
severally to purchase, and the Bank has agreed to sell to them severally, the
principal amount of Bonds set forth opposite their names in Exhibit A
attached hereto and aggregating $1,000,000,000, at 98.870% plus accrued
interest, if any, from August 21, 1996. The Bonds are offered for sale
subject to issuance and acceptance by the Underwriters and subject to prior
sale. Delivery of the Bonds was made on August 21, 1996.
The names of the Underwriters and the principal amount of Bonds each
Underwriter has agreed to purchase are set forth in Exhibit A hereto.
<PAGE>
The Underwriting Agreement (Exhibit B) provides that the obligations of the
several Underwriters are subject to certain conditions, including approval of
certain legal matters by counsel and receipt by them of a certificate of a
principal officer of the Bank to the effect that prior to the closing date there
has been no material adverse change in the condition of the Bank from that set
forth in the Prospectus and the Information Statement issued in respect of the
Bonds.
As of August 14, 1996, the Underwriters entered into an Agreement Among
Underwriters (the "Agreement Among Underwriters") (Exhibit C) among
themselves for the purchase and distribution of the Bonds.
The only arrangements known to the Bank, and the Bank is informed by the
Underwriters that the only arrangements known to them, relative to the
stabilization of the market, are as set forth in the Agreement Among
Underwriters, the form of which is attached as Exhibit C hereto.
The Underwriters propose to offer all the Bonds to the public at the public
offering price set forth on the cover page of the Prospectus. Merrill Lynch
International and Swiss Bank Corporation, as Representatives of the
Underwriters, may offer Bonds to certain dealers who are not members of the
underwriting group or through selected dealers at a price which represents a
concession not in excess of 0.30% of the principal amount under the public
offering price.
ITEM 3. DISTRIBUTION SPREAD
<TABLE>
<CAPTION>
SELLING DISCOUNTS
PRICE TO PUBLIC AND COMMISSIONS(1) PROCEEDS TO THE BANK(2)
<S> <C> <C>
Per Unit 99.195% 0.325% 98.870%
Total $991,950,000 $3,250,000 $988,700,000
</TABLE>
ITEM 4. DISCOUNTS AND COMMISSIONS TO SUB-UNDERWRITERS AND DEALERS
See Item 2.
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(1) See Item 2 for information about concessions
(2) Without deducting expenses of the Bank which are not yet known
<PAGE>
ITEM 5. OTHER EXPENSES OF DISTRIBUTION
The Bank's estimated expenses of distribution are as follows:
Listing fees $ 20,000.00
Rating Agencies 18,000.00
Fiscal Agent's and Special Agent's fees
(Present value of estimated expenses over
life of the Bonds) 295,120.00
Accounting fees 6,520.00
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Total $ 339,640.00
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ITEM 6. APPLICATION OF PROCEEDS
The net proceeds will be used in the general operations of the
Bank.
ITEM 7. EXHIBITS
A. Names of Underwriters and Underwriting Commitments
B. Underwriting Agreement (August 14, 1996)
C. Agreement among Underwriters (August 14, 1996)
D. Prospectus dated August 14, 1996
E. Opinion of Deputy General Counsel, Administration, Finance and
Institution Affairs, of the Bank, dated August 21, 1996, as to the
legality of the Bonds delivered to the Underwriters.
F. Supplement No. 66, dated as of August 21, 1996, to the Fiscal
Agency Agreement dated as of November 30, 1983 between the Bank
and the Federal Reserve Bank of New York.
<PAGE>
EXHIBIT A
NAMES OF UNDERWRITERS AND UNDERWRITING COMMITMENTS
The Underwriters listed below have severally agreed to purchase, and the
Bank has agreed to sell them severally, the principal amount of Bonds set forth
below opposite their names.
NAME PRINCIPAL AMOUNT
Merrill Lynch International $ 324,500,000.00
Swiss Bank Corporation 324,500,000.00
Banque Paribas 27,000,000.00
CS First Boston Limited 27,000,000.00
Deutsche Bank AG London 27,000,000.00
Goldman, Sachs & Co. 27,000,000.00
IBJ International plc 27,000,000.00
Lehman Brothers International (Europe) 27,000,000.00
Midland Bank plc 27,000,000.00
J.P. Morgan Securities 27,000,000.00
Morgan Stanley & Co. International Ltd. 27,000,000.00
Nikko International Plc 27,000,000.00
Nomura International plc 27,000,000.00
Tokyo-Mitsubishi International plc 27,000,000.00
UBS Limited 27,000,000.00
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Total $ 1,000,000,000.00
===================
<PAGE>
U.S.$1,000,000,000
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
6-5/8% U.S. Dollar Global Bonds of 1996, due August 21, 2006
UNDERWRITING AGREEMENT
----------------------
August 14, 1996
Merrill Lynch International,
Ropemaker Place,
25 Ropemaker Street,
London EC2Y 9LY.
Swiss Bank Corporation,
One High Timber Street,
London EC4V 3SB.
As Representatives of the several Underwriters
Dear Sirs:
International Bank for Reconstruction and Development (hereinafter
called the "Bank") proposes to issue U.S.$1,000,000,000 aggregate principal
amount of 6-5/8% U.S. Dollar Global Bonds of 1996, due August 21, 2006
(hereinafter called the "Securities"). The Securities are to be issued pursuant
to a resolution adopted by the Executive Directors of the Bank authorizing the
Securities. The Bank will furnish to the several Underwriters named in
Schedule I hereto (the "Underwriters") copies of an Information Statement of the
Bank dated as of March 18, 1996 and a prospectus dated the date hereof. Such
prospectus (including the Information Statement and any other documents
incorporated therein by reference) is hereinafter referred to as the Prospectus.
I.
The Bank agrees to sell to the several Underwriters, and the
Underwriters, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree to purchase
from the Bank, severally and not jointly, the respective principal amounts of
Securities set forth opposite their names in Schedule I hereto at 98.870% of
their principal amount, plus accrued interest from August 21, 1996 to the
Closing Date (as defined herein).
<PAGE>
If a default occurs with respect to one or more of the several
underwriting commitments to purchase any Securities under this Agreement,
Underwriters who have not defaulted with respect to their respective several
underwriting commitments will take up and pay for, as nearly as practicable in
proportion to their respective several underwriting commitments, the Securities
as to which such default occurred, up to but not exceeding in the aggregate 20%
of the principal amount of the Securities for which the non-defaulting
Underwriters were originally committed; PROVIDED, HOWEVER, if the aggregate
principal amount of Securities as to which such default occurred exceeds 16.667%
of the principal amount of the Securities, the non-defaulting Underwriters shall
be entitled to terminate this Agreement without any liability on the part of any
non-defaulting Underwriters. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
II.
The Underwriters will offer their respective portions of Securities
upon the terms set forth in the Prospectus.
Each Underwriter agrees that it will not offer, sell or deliver any of
the Securities, directly or indirectly, or distribute the Prospectus or any
other offering material relating to the Securities, in any jurisdiction except
under circumstances that will result in compliance with the applicable laws
thereof.
III.
Payment for the Securities shall be made at 10:00 a.m. Eastern time on
August 21, 1996, or such other date not later than August 28, 1996 as may be
agreed upon by you and the Bank, upon delivery of Securities in bookentry form
by credit to one or more securities accounts maintained by the Federal Reserve
Bank of New York, 33 Liberty Street, New York, N.Y., for the respective accounts
of the several Underwriters, such delivery to be in accordance with your
instructions, and such payment, unless otherwise agreed, to be effected by
delivery to the Federal Reserve Bank of New York of irrevocable instructions
issued by a New York City bank or banks specifying that the Federal Reserve Bank
of New York should immediately charge the account or accounts of such bank or
banks with the amount payable by the Underwriters to the Bank hereunder and
immediately credit such amount to the account of the Bank. The date and time of
such payment and delivery is herein referred to as the Closing Date.
IV.
The several obligations of the Underwriters hereunder are subject to
the following conditions:
(a) Prior to the Closing Date, there shall have been no material
adverse change in the condition of the Bank from that set forth in the
Prospectus, and you
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<PAGE>
shall have received, on the Closing Date, a certificate, dated the Closing
Date, signed by the President, any Managing Director, the Vice President
and Treasurer or the Vice President and General Counsel, of the Bank to the
foregoing effect.
(b) Subsequent to the date hereof, and prior to the Closing Date, no
downgrading shall have occurred in the rating accorded any of the Bank's
outstanding debt securities by either Moody's Investors Service, Inc. or
Standard & Poor's Corporation.
(c) You shall have received, on the Closing Date, an opinion, dated
the Closing Date, of the Vice President and General Counsel, the Deputy
General Counsel or the Chief Counsel, Finance, of the Bank, to the effect
that (i) the Bank is duly established and existing under its Articles of
Agreement, (ii) this Agreement has been duly authorized, executed and
delivered by the Bank, (iii) the Bank has obtained all governmental
approvals required pursuant to its Articles of Agreement in connection
with the offering, issue and sale of the Securities, (iv) the Bank has
received an exemption from the need for authorization from the Minister
of Finance of Japan pursuant to the Foreign Exchange and Foreign
Trade Control Law of Japan (Law No. 228 of 1949, as amended) to offer,
issue and sell of its debt securities in Japan, and no other Japanese
governmental approvals are required in connection with the offering,
issue and sale of the Securities, (v) the creation, issue, sale and
delivery of the Securities, and the execution of the Securities in
definitive registered form, have been duly authorized, the Securities
have been duly issued and delivered in bookentry form, and the Securities
in bookentry form constitute, and when executed, authenticated, issued
and delivered the Securities in definitive registered form will
constitute, valid and legally binding obligations of the Bank in
accordance with their terms and (vi) under existing law it is not
necessary in connection with the public offering and sale of the
Securities (A) to register the Securities under the U.S. Securities Act
of 1933, as amended, or to qualify an indenture with respect thereto
under the U.S. Trust Indenture Act of 1939, as amended, or (B) to
register the Securities under the Securities and Exchange Law of Japan
(Law No. 25 of 1948, as amended).
(d) You shall have received, on the Closing Date, an opinion, dated
the Closing Date, of Sullivan & Cromwell covering the matters in (ii), (v)
and (vi)(A) of (c) above. In rendering such opinion, Sullivan & Cromwell
may rely with respect to the due establishment and existence of the Bank
upon the opinion of counsel of the Bank.
(e) You shall have received, on the Closing Date, a letter, dated
the Closing Date, of the Vice President and General Counsel, the Deputy
General Counsel or the Chief Counsel, Finance, of the Bank, and a letter,
dated the Closing Date, of Sullivan & Cromwell, to the effect that, while
they assume no responsibility with respect to the statements in the
Prospectus, such respective counsel do not believe that the Prospectus,
as of its date, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Such letters will not relate to the financial
statements or other financial data contained in the
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<PAGE>
Prospectus. In giving such letter, Sullivan & Cromwell may rely with
respect to the due establishment and existence of the Bank upon the opinion
of counsel of the Bank.
(f) You shall have received, on the Closing Date, a letter, dated the
Closing Date, of Price Waterhouse (International Firm), confirming that
they are independent accountants with respect to the Bank within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its rulings and
interpretations, and stating in effect that on the basis of a reading of
the latest available financial statements of the Bank, inquiries of
officials of the Bank responsible for financial and accounting matters and
other specified procedures through a specified date not more than five
business days prior to the Closing Date, nothing came to their attention
that caused them to believe that there were any increases in the borrowings
of the Bank or any decreases in capital stock and reserves of the Bank, in
each case as compared with amounts included in the audited financial
statements included in the Prospectus, except in all instances for changes
or decreases which the Prospectus discloses have occurred or may occur or
which are stated in such letter. The letter shall also state that they
have read the dollar amounts, percentages and average lives set forth or
incorporated by reference in the Prospectus under the captions "Summary
Information", "Selected Financial Data", "Equity", "Borrowings",
"Statements of Income", "Operations of the Bank", "Derivatives", "Principal
Information Concerning the Bank", "Summary of Balance Sheets at June 30,
1996 and June 30, 1995" and "Summary Statements of Income for the Fiscal
Years Ended June 30, 1996 and June 30, 1995" and have found such dollar
amounts, percentages and average lives to be in agreement with the Bank's
financial statements or accounting records and with computations made by
the Bank therefrom.
V.
In further consideration of the agreements of the Underwriters herein
contained, the Bank covenants as follows:
(a) The Bank will furnish each Underwriter without charge as many
copies of the Prospectus as you may reasonably request.
(b) Before amending or supplementing the Prospectus, the Bank will
furnish you a copy of each such proposed amendment or supplement.
(c) So long as in your judgment the distribution of the Securities by
the Underwriters has not been completed (but in no event for more than one
year after the date of the initial public offering of the Securities), if
any event shall occur as a result of which, in the judgment of the Bank, it
is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, the Bank will forthwith
prepare and furnish, at its own expense, to the Underwriters and to any
dealers (whose names and addresses you will furnish to the Bank) to whom
Securities may have been sold by you on behalf of the Underwriters and to
any other dealers
-4-
<PAGE>
upon request, either amendments to the Prospectus or supplemental
information so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading.
(d) The Bank will endeavor to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to pay any fees charged by investment rating
services for the rating of the Securities.
(e) The Bank will pay for the costs and expenses of its own counsel
and other professional advisers incurred in connection with the issue of
the Securities, fees and expenses of the fiscal agent and other paying
agents, the listing of the Securities on the Luxembourg Stock Exchange and
the New York Stock Exchange, and all other costs and expenses incident to
the performance of its obligations hereunder. The Underwriters shall be
liable for the costs of their own counsel, the printing of the Prospectus
and definitive Securities, and all other costs and expenses incidental to
the performance of their obligations hereunder.
VI.
The Bank represents and warrants to each Underwriter that the
Prospectus at the date thereof will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that this representation and warranty does not
apply to statements or omissions in the Prospectus based upon information
furnished in writing to the Bank by any Underwriter expressly for use therein.
The Bank agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the U.S. Securities Act of 1933, as amended, from and against any
and all losses, claims, damages and liabilities, joint or several, to which such
Underwriter or such controlling person may become subject, under the U.S.
Securities Act of 1933, as amended, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (if used within the period set forth in
paragraph (c) of Article V hereof and as amended or supplemented if the Bank
shall have furnished any amendments or supplements thereto), any amendment or
supplement thereto or any preliminary prospectus or any other selling or
advertising material approved by the Bank for use by the Underwriters in
connection with the sale of the Securities, or arising out of or based upon any
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except insofar as such losses, claims, damages
or liabilities arise out of or are based upon any such untrue statement or
alleged untrue statement or omission or alleged omission based upon information
furnished in writing to the Bank by any Underwriter expressly for use therein;
PROVIDED, HOWEVER, that the Bank shall not be liable to any Underwriter under
the indemnity agreement in this paragraph with respect to any preliminary
prospectus or any other such selling or
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<PAGE>
advertising material to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus correcting such
untrue statement or omission if the Bank has previously furnished copies thereof
to such Underwriter. This indemnity agreement will be in addition to any
liability which the Bank may otherwise have.
In case any action shall be brought against any Underwriter or any
such controlling person based upon the Prospectus (or any amendment or
supplement thereto) and in respect of which indemnity may be sought against the
Bank, such Underwriter shall promptly notify the Bank in writing, and the Bank
upon request of such Underwriter shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Underwriter and the
payment of all expenses. Any Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or such controlling person unless (i) the
employment of such counsel has been specifically authorized in writing by the
Bank or (ii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and the Bank
and such Underwriter or such controlling person shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Bank or that there may be
another conflict of interest arising out of the counsel referred to in the
preceding sentence acting for the Bank and such Underwriter (it being
understood, however, that the Bank shall not in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters and controlling persons, which firm shall be
designated in writing by you, and that all such fees and expenses shall be
reimbursed from time to time as incurred). The Bank shall not be liable for any
settlement of any such action effected without its consent, which consent shall
not be unreasonably withheld, but if settled with the consent of the Bank or if
there be a final judgment for the plaintiff in any such action, the Bank agrees
to indemnify and hold harmless any Underwriter from and against any loss or
liability by reason of such settlement or judgment.
Each Underwriter agrees to indemnify and hold harmless the Bank, to
the same extent as the foregoing indemnity from the Bank to each Underwriter,
but only with reference to any information relating to such Underwriter
furnished in writing to the Bank by such Underwriter expressly for use in the
Prospectus. In case any action shall be brought against the Bank based upon the
Prospectus (or any amendment or supplement thereto) and in respect of which
indemnity may be sought against any Underwriter, the Underwriter shall have the
rights and duties given to the Bank, and the Bank shall have the rights and
duties given to the Underwriter, by the immediately preceding paragraph of this
Article VI. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have.
If the indemnification provided for in this Article VI is unavailable
to an indemnified party under the second or fourth paragraphs hereof in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of
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<PAGE>
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by the Bank on the one hand and the Underwriters on the other
from the offering of the Securities. The relative benefits received by the Bank
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) of the Securities received by the Bank bear to the total underwriting
discounts and commissions received by the Underwriters in respect of the
Securities. The Bank and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this paragraph were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this paragraph. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, no
Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Securities purchased by such Underwriter
hereunder. No person guilty of fraudulent misrepresentation shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
paragraph are several in proportion to their respective underwriting proportions
and not joint.
The indemnity and contribution agreements contained in this Article VI
and the representations and warranties of the Bank set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Bank and (iii) acceptance of and payment for the Securities hereunder.
VII.
The Underwriters or the Bank shall have the right to terminate this
Agreement, by giving the notice indicated below, at any time at or prior to the
Closing Date if there shall have occurred any national or international calamity
or development, crisis of a political or economic nature, or change in the money
or capital markets in any country in which the Securities are being offered, the
effect of which on the financial markets of any such country shall be such as in
the judgment of the Representatives or the Bank materially adversely affects the
ability of the Underwriters to sell the Securities. Notice of any such
termination shall be in writing and, if to the Underwriters, shall be mailed,
delivered or telecopied and confirmed in writing to the Representatives at their
addresses as set forth above, or, if to the Bank, shall be mailed, delivered or
telecopied and confirmed in writing to it at 1818 H Street, N.W., Washington,
D.C. 20433, Attention: Vice President and Treasurer.
If this Agreement shall be terminated by the Underwriters or any of
them because of any failure on the part of the Bank to comply with the terms or
to fulfill any of the
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<PAGE>
conditions of this Agreement, or if for any reason the Bank shall be unable to
perform its obligations under this Agreement, the Bank will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all of their out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
them in connection with the Securities. If this Agreement shall be terminated
as provided in this Article VII, neither the Underwriters nor the Bank shall be
under further obligation hereunder except as set forth in Article VI and
paragraph (e) of Article V hereof.
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
By:
------------------------------
(Authorized Signatory)
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
MERRILL LYNCH INTERNATIONAL
SWISS BANK CORPORATION
By: MERRILL LYNCH INTERNATIONAL
By:
----------------------------
(Authorized Signatory)
As Representatives of the several Underwriters
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<PAGE>
SCHEDULE I
Underwriting
Commitment
(Principal
Underwriter Amount)
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Merrill Lynch International .........................................324,500,000
Swiss Bank Corporation ..............................................324,500,000
Banque Paribas .......................................................27,000,000
CS First Boston Limited ..............................................27,000,000
Deutsche Bank AG London ..............................................27,000,000
Goldman Sachs & Co....................................................27,000,000
IBJ International plc ................................................27,000,000
Lehman Brothers International (Europe) ...............................27,000,000
Midland Bank plc .....................................................27,000,000
J.P. Morgan Securities Ltd. ..........................................27,000,000
Morgan Stanley & Co. International Limited ...........................27,000,000
Nikko Europe Plc .....................................................27,000,000
Nomura International plc .............................................27,000,000
Tokyo-Mitsubishi International plc ...................................27,000,000
UBS Securities LLC ...................................................27,000,000
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Total .......................................................$1,000,000,000
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<PAGE>
U.S.$1,000,000,000
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
6-5/8% U.S. Dollar Global Bonds of 1996, due August 21, 2006
AGREEMENT AMONG UNDERWRITERS
August 14, 1996
Merrill Lynch International,
Ropemaker Place,
25 Ropemaker Street,
London EC2Y 9LY.
Swiss Bank Corporation,
One High Timber Street,
London EC4V 3SB.
Dear Sirs:
I.
We hereby agree with you with respect to the offering of an aggregate
of U.S.$1,000,000,000 principal amount of 6-5/8% U.S. Dollar Global Bonds of
1996, due August 21, 2006 (hereinafter called the "Securities") of International
Bank for Reconstruction and Development (hereinafter called the "Bank") and with
respect to the purchase by you and the other Underwriters hereinafter referred
to (including ourselves), severally, of the Securities.
We authorize you on our behalf to execute and deliver the Underwriting
Agreement in substantially the accompanying form and to agree to any variation
of its terms (except as to the purchase price (unless the initial offering price
of the Securities is to be determined by formula pricing)). If the initial
offering price of the Securities is to be determined by formula pricing, we also
authorize you to determine the initial offering price of the Securities and the
underwriting discount. It is understood that changes may be made in those who
are to be Underwriters and in the respective amounts of the Securities to be
purchased by them, but that the amount of the Securities to be purchased by us
as set forth in Article I of the form of Underwriting Agreement will not be
changed without our consent except as provided in the Underwriting Agreement.
The ratio which the aggregate principal amount of the Securities set forth
opposite each Underwriter's name in the Underwriting Agreement plus any increase
in the amount of Securities to be purchased by such Underwriter pursuant to the
provisions of the Underwriting Agreement regarding any defaults of Underwriters
(its "purchase obligation") bears to U.S.$1,000,000,000 is hereinafter referred
to as the underwriting proportion of such Underwriter.
<PAGE>
II.
We authorize you to act as the Representatives of the Underwriters in
the offering of the Securities and to take such action as you deem advisable in
connection with the performance of the Underwriting Agreement and this Agreement
and the purchase, carrying, sale and distribution of the Securities. You may
waive performance or satisfaction by the Bank of obligations or conditions
included in the Underwriting Agreement if in your judgment such waiver will not
have a material adverse effect upon the interests of the Underwriters.
The initial public offering of the Securities is to be made at the
public offering price plus accrued interest, if any, and on the other terms and
conditions set forth in the Prospectus relating to the Securities. We authorize
you to furnish the Bank with information to be included in the Prospectus with
respect to the terms of offering. Public advertisement of the offering, if any,
shall be made by you on behalf of the Underwriters on such date as you shall
determine. It is understood that we have not advertised the offering and will
not do so until after such date. Any advertisement we may then make will be our
own responsibility and at our own expense.
We authorize you to sell for our account to dealers, other than any of
the undersigned unless the Bank and you agree that sales to the undersigned will
be permitted, at the public offering price less the concession to dealers, such
Securities as you shall determine. Such concession may be allowed only as
consideration for services rendered in distribution to dealers who are actually
engaged in the investment banking or securities business and who are advised
that the Securities should be treated as if they were subject to Sections 8, 24
and 36 of Article III of the National Association of Securities Dealers' Rules
of Fair Practice. Sales of Securities to dealers shall be made for the account
of each Underwriter approximately in the proportion that the Securities of such
Underwriter retained by you for sales to dealers bear to the total Securities so
retained. As used in this paragraph, "dealers" shall include Underwriters,
banks and trust companies acting as dealers.
We hereby confirm that, except as may be stated in this Agreement or
the Prospectus, we do not know of any arrangements (a) for withholding
commissions, or otherwise to hold each Underwriter or dealer responsible for the
distribution of its participation in the Securities, (b) for any discounts or
commissions to be allowed or paid to dealers or others, (c) to limit or restrict
the sale of the Securities or other securities of the Bank or (d) to stabilize
the market for the Securities or other securities of the Bank for the account of
the Bank or the Underwriters, or of any transactions already effected to
accomplish that purpose.
You will advise us promptly, on the date of the public offering, as to
the Securities which we shall retain for direct sale, which, for each of the
undersigned Underwriters, shall be a minimum of ninety percent of such
Underwriter's purchase obligation, and after such advice is received by us we
will offer such Securities to the public in conformity with the terms of
offering set forth in the Prospectus. At any time prior to the termination of
this Agreement any Securities which are held by you for sale for our account as
set forth above but not sold may, on our request and at your discretion, be
released to us for direct sale, and Securities so released to us shall no longer
be deemed held for sale by you.
-2-
<PAGE>
From time to time prior to the termination of this Agreement, on your
request, we will advise you of the amounts of Securities remaining unsold which
were retained by or released to us for direct sale, and, on your request, we
will release to you any such Securities for sale by you for our account to
dealers.
If for United States Federal income tax purposes the Underwriters
should be deemed to constitute a partnership, then we elect to be excluded from
the application of Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue
Code of 1986, as amended, and agree not to take any position inconsistent with
such election, and you are authorized in your discretion to execute on our
behalf such evidence of such election as may be required by the Internal Revenue
Service.
III.
We acknowledge that Merrill Lynch International (the "Stabilizing
Underwriter") is appointed stabilizing underwriter for the Securities. However,
this clause does not authorize the Stabilizing Underwriter to carry out
stabilization and/or over-allotment transactions on behalf of the Underwriters.
Any such transaction shall be for accounts of the Representatives and shall be
effected in accordance with applicable laws. No stabilization activity will be
effected by the Stabilizing Underwriter without prior consultation with, and the
prior agreement of Swiss Bank Corporation.
If pursuant to the provisions of the preceding paragraph and prior to
the termination of this Agreement (or prior to such earlier date as you may have
determined) you purchase or contract to purchase in the open market or otherwise
any Securities which were retained by or released to us for direct sale, or any
Securities which may have been issued on transfer or in exchange for such
Securities, and which Securities were therefore not effectively placed for
investment by us, we authorize you either to charge our account with an amount
equal to the concession to dealers with respect thereto, which amount shall be
credited against the cost of such Securities, or to require us to repurchase
such Securities at a price equal to the total cost of such purchase, including
accrued interest and commission, if any. Securities may be delivered on such
repurchase in bookentry or certificated form, and, if purchased and delivered in
certificated form, need not be the identical certificates so purchased.
We agree that, until the termination of this Agreement, or such
earlier date as you may determine, we will not purchase or sell any Securities
or any other securities of the Bank which you may designate, except as otherwise
provided in this Agreement or in the Underwriting Agreement. This will not
prohibit us from (i) selling outstanding securities of the Bank owned by us at
the time of the execution of this Agreement, (ii) purchasing or selling
Securities or any other securities of the Bank as a broker pursuant to
unsolicited orders, (iii) purchasing outstanding securities of the Bank for our
account pursuant to unsolicited offers or (iv) selling securities of the Bank
purchased by us in accordance with the provisions of clause (iii) above. Except
as otherwise required by laws, regulations or rules of securities exchanges
applicable to us, if you notify us that purchases pursuant to clause (iii) above
are to be discontinued, we will not thereafter purchase securities of the Bank
pursuant to such clause.
-3-
<PAGE>
IV.
On your demand, on the Closing Date (as defined in the Underwriting
Agreement) prior to 10:00 a.m. Eastern time, we will effect a transfer to you in
immediately available funds of an amount equal to the public offering price of
and accrued interest on, less the underwriting discount of .325% in respect of,
either (i) the Securities which we are obligated to purchase from the Bank or
(ii) such of the Securities which we are obligated to purchase from the Bank as
shall have been retained by or released to us for direct sale, as you shall
advise. You will make payment to the Bank for our account against delivery to
you for our account of the Securities which we are obligated to purchase from
the Bank, and you will deliver to us such of the Securities purchased by us as
shall have been retained by or released to us for direct sale.
V.
We authorize you to receive and credit to our account any amount which
may accrue to us under the other provisions of this Agreement.
VI.
For the purpose of carrying out the provisions of this Agreement, we
authorize you, in your discretion, to advance your own funds for our account,
charging current interest rates, to arrange loans for our account, and in
connection therewith to execute and deliver any notes or other instruments and
to hold or pledge as security therefor all or any of the Securities which you
may be holding for our account under this Agreement. Any lender may rely upon
your instructions in all matters relating to any such loan.
Out of the payment received by you for Securities sold for our account
you will remit to us promptly an amount equivalent to the purchase price and
accrued interest, if any, paid by us for such Securities and credit or charge
our account with the difference between the price at which such Securities were
sold and the purchase price thereof.
You may deliver to us from time to time against payment, for carrying
purposes only, any Securities which you are holding for sale for our account but
which have not been sold and paid for. We will redeliver to you against payment
any Securities so delivered to us for carrying purposes at such times as you may
demand.
VII.
This Agreement shall terminate 30 days after the date hereof unless
sooner terminated by you. You may at your discretion on notice to us prior to
the termination of this Agreement alter any of the terms of offering determined
pursuant to Article II, or terminate or suspend the effectiveness of
Article III, or any part thereof.
-4-
<PAGE>
Upon termination of this Agreement, or prior thereto at your
discretion, you shall deliver to us any Securities purchased by us from the Bank
and held by you for sale for our account to dealers but not sold and paid for.
As soon as practicable after termination of this Agreement our account hereunder
shall be settled and paid. Any of our funds in your hands may be held with your
general funds without accountability for interest.
VIII.
The Prospectus (including the Information Statement of the Bank and
any other documents incorporated therein by reference) in form satisfactory to
you shall be deemed satisfactory to us.
IX.
We agree to indemnify and hold harmless each other Underwriter and
each person, if any, who controls any such Underwriter within the meaning of
Section 15 of the U.S. Securities Act of 1933 to the extent and upon the terms
which each Underwriter agrees to indemnify and hold harmless the Bank as set
forth in Article VI of the Underwriting Agreement.
Each Underwriter (including you) will pay upon your request, as
contribution, its underwriting proportion of (i) any losses, claims, damages or
liabilities, joint or several, paid or incurred by any Underwriter to any person
other than an Underwriter, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus, any
amendment or supplement thereto or any preliminary prospectus or any other
selling or advertising material approved by you for use by the Underwriters in
connection with the sale of the Securities, or arising out of or based upon any
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading (other than an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information furnished in writing to the Bank by any Underwriter
specifically for use therein) and (ii) all legal and other expenses reasonably
incurred by you or with your consent in connection with investigating or
defending any such loss, claim, damage or liability, or any action in respect
thereof; provided, however, that no Underwriter shall be entitled to
contribution from any other Underwriter where the Underwriter seeking
contribution has not offered the Securities to the public in compliance with the
terms of this Agreement and in the manner described in the Prospectus and such
losses, claims, damages or liabilities arise out of such non-compliance. If any
such claim is asserted, you may take such action in connection therewith as you
deem necessary or desirable, including retention of counsel for the
Underwriters, and in your discretion separate counsel for any particular
Underwriter or group of Underwriters, and may settle or consent to the
settlement of any such claim, on advice of counsel retained by you, with the
approval of a majority in interest of the Underwriters. Any Underwriter may
elect to retain its own counsel at its own expense.
The provisions of this Article IX shall survive the termination of
this Agreement.
-5-
<PAGE>
X.
Default by any one or more Underwriters hereunder or under the
Underwriting Agreement shall not release the other Underwriters from any of
their obligations or affect the liability of any defaulting Underwriter to the
other Underwriters for damages resulting from such default.
In the event that any Underwriter shall default in its obligations
hereunder pursuant to Article IX or the fourth paragraph of this Article X, we
will assume our proportionate share (based upon the respective underwriting
proportions of the non-defaulting Underwriters) of such obligations, but no such
assumption shall affect the liability of any defaulting Underwriter.
If one or more Underwriters default under the Underwriting Agreement,
you may arrange for the purchase by others, including non-defaulting
Underwriters, of Securities not taken up by the defaulting Underwriter or
Underwriters.
If the Underwriting Agreement is terminated as permitted by the terms
thereof, our obligations hereunder shall immediately terminate except (i) as set
forth in Article IX and (ii) that such termination shall not affect the
liability of any defaulting Underwriter.
XI.
Nothing herein contained constitutes the Underwriters a partnership,
association or separate entity, and the rights and liabilities of ourselves and
of each of the other Underwriters are several and not joint.
Your authority hereunder and under the Underwriting Agreement shall be
exercised by you jointly. You shall be under no liability to us for any act or
omission except for obligations expressly assumed by you herein, and no
obligations on your part will be implied hereby or inferred herefrom. You will
not have any responsibility with respect to the right of any Underwriter or
other person to sell Securities in any jurisdiction, notwithstanding any
information you may furnish in that connection.
The Securities purchased by, or on behalf of, the respective
Underwriters shall remain the property of such Underwriters until sold, and
title to any such Securities shall not in any event pass to you by virtue of any
of the provisions of this Agreement.
Any notice from you to us shall be deemed to have been duly given if
mailed or sent by facsimile transmission to us at our address or facsimile
transmission number as furnished to you.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
-6-
<PAGE>
This Agreement is being executed by us and delivered to you in
duplicate. Upon your confirmation hereof and of agreements in identical form
with each of the other Underwriters, this Agreement shall constitute a valid and
binding contract between us.
Very truly yours,
BANQUE PARIBAS
CS FIRST BOSTON LIMITED
DEUTSCHE BANK AG LONDON
GOLDMAN SACHS & CO.
IBJ INTERNATIONAL PLC
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
MIDLAND BANK PLC
J.P. MORGAN SECURITIES LTD.
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
NIKKO EUROPE PLC
NOMURA INTERNATIONAL PLC
TOKYO-MITSUBISHI INTERNATIONAL PLC
UBS SECURITIES LLC
By:
--------------------------------------
Attorney-in-fact for each of the
several Underwriters named above
Confirmed the day and year first above written:
MERRILL LYNCH INTERNATIONAL
SWISS BANK CORPORATION
By: MERRILL LYNCH INTERNATIONAL
By:
----------------------------------
(Authorized Signatory)
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<PAGE>
PROSPECTUS
[LOGO]
U.S. $1,000,000,000
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
6 5/8% U.S. DOLLAR GLOBAL BONDS OF 1996,
DUE AUGUST 21, 2006
PRICE 99.195% PLUS ACCRUED INTEREST, IF ANY, FROM AUGUST 21, 1996
------------------------
The Bonds are offered for sale in the Eurodollar, Japanese and United States
markets.
The Bonds will bear interest from August 21, 1996. Interest will be payable
semi-annually on February 21 and August 21 of each year. The first interest
payment will be on February 21, 1997. The Bonds will mature on August 21, 2006
and will not be redeemable prior to maturity.
Application is being made to list the Bonds on the Luxembourg Stock Exchange
and the New York Stock Exchange.
The Underwriters have agreed to purchase from the Bank all the Bonds at
98.87% of their principal amount plus accrued interest, if any, from August 21,
1996. The Bonds are offered for sale subject to issuance and acceptance by the
Underwriters and subject to prior sale. The Bonds will be issued in bookentry
form through the Federal Reserve Bank of New York. They will be held in accounts
with institutions having access in the United States to the bookentry system
operated by the Federal Reserve Banks, or in accounts with Euroclear or Cedel
participants that are indirectly connected with such bookentry system through
Euroclear or Cedel. The Bonds may be exchanged free of charge for registered
definitive securities upon request. It is expected that delivery of the Bonds
will be made on or about August 21, 1996 against payment therefor in immediately
available funds.
------------------------
MERRILL LYNCH & CO. SBC WARBURG
A DIVISION OF SWISS
BANK CORPORATION
CS FIRST BOSTON DEUTSCHE MORGAN GRENFELL
GOLDMAN, SACHS & CO. HSBC MARKETS
IBJ INTERNATIONAL PLC J.P. MORGAN SECURITIES LTD.
LEHMAN BROTHERS MORGAN STANLEY & CO.
INTERNATIONAL
NIKKO EUROPE PLC NOMURA SECURITIES
PARIBAS CAPITAL MARKETS TOKYO-MITSUBISHI INTERNATIONAL PLC
UBS SECURITIES
The activities of the Underwriters in connection with this transaction are
led jointly by Merrill Lynch International and Swiss Bank Corporation.
The date of this Prospectus is August 14, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, MERRILL LYNCH INTERNATIONAL MAY, SUBJECT
TO APPLICABLE LAWS, OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME. ANY STABILIZATION ACTIVITIES
EFFECTED BY MERRILL LYNCH INTERNATIONAL ARE SUBJECT TO PRIOR AGREEMENT WITH
SWISS BANK CORPORATION.
No person is authorized to give any information or to make any
representation not contained in this Prospectus, and any information or
representation not contained herein must not be relied upon as having been
authorized by or on behalf of the International Bank for Reconstruction and
Development, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. (the "Bank") or
by any of the underwriters named on the cover hereof (the "Underwriters"). The
delivery of this Prospectus at any time does not imply that the information
contained herein is correct at any time subsequent to its date.
The Bank, having made all reasonable inquiries, confirms that this
Prospectus contains all information with regard to the Bonds and the Bank that
is material in the context of the issue of the Bonds, that the information is
true and accurate in all material respects and is not misleading, and that there
are no other facts the omission of which makes this Prospectus as a whole or any
such information misleading in any material respect.
This Prospectus does not constitute an offer of, or an invitation by or on
behalf of the Bank or the Underwriters to subscribe for or purchase, any of the
Bonds.
The distribution of this Prospectus and the offering or sale of the Bonds in
certain jurisdictions may be restricted by law. Persons into whose possession
this Prospectus comes are required by the Bank and the Underwriters to inform
themselves about and to observe any such restrictions. (See "Underwriting and
Distribution".)
The Bonds offered hereby are not required to be registered under the
Securities Act of 1933. Accordingly, no registration statement has been filed
with the U. S. Securities and Exchange Commission (the "Commission"). The Bonds
have not been approved or disapproved by the Commission or any state securities
commission nor has the Commission or any state securities commission passed upon
the accuracy or adequacy of this Prospectus. Any representation to the contrary
is a criminal offense.
In this Prospectus, references to "dollars" and "$" are to United States
dollars.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Availability of Information and Incorporation by Reference................................................. 3
Description of the Bonds................................................................................... 3
Terms and Conditions of the Bonds.......................................................................... 4
Tax Matters................................................................................................ 7
Validity of the Bonds...................................................................................... 9
Miscellaneous.............................................................................................. 9
Underwriting and Distribution.............................................................................. 9
Listing and Clearing....................................................................................... 10
Use of Proceeds............................................................................................ 10
Principal Information Concerning the Bank.................................................................. 10
Assets................................................................................................... 10
Liabilities, Equity and Profitability.................................................................... 14
Capitalization........................................................................................... 15
Summary of Balance Sheet at June 30, 1996 and June 30, 1995................................................ 16
Summary Statements of Income for the Fiscal Years Ended June 30, 1996 and June 30, 1995.................... 17
</TABLE>
2
<PAGE>
AVAILABILITY OF INFORMATION AND INCORPORATION BY REFERENCE
EURODOLLAR MARKET
The Bank has filed with the Luxembourg Stock Exchange an Information
Statement dated as of March 18, 1996 (the "Information Statement") which
describes the Bank, its capital, operations, administration, Articles of
Agreement (the "Articles") and legal status. The Information Statement also
includes the Bank's unaudited financial statements as of December 31, 1995 and
audited financial statements as of June 30, 1995 and June 30, 1994.
Copies of the Information Statement will be available upon request directed
to the main office of the Special Agent in Luxembourg, which is Banque Paribas
Luxembourg, Luxembourg. In addition, until the maturity of the Bonds,
Bondholders may, at the main office of the Special Agent in Luxembourg, inspect
copies of the Articles and decisions made by the Executive Directors of the Bank
on questions of interpretation of the Articles, inspect copies of the Fiscal
Agency Agreement, and obtain copies of the Bank's annual report and its regular
quarterly unaudited and annual audited financial statements published subsequent
to the date of this Prospectus.
JAPANESE MARKET
The Bank will provide without charge copies of the Information Statement and
any quarterly or annual financial statements published subsequent to the date of
this Prospectus and prior to the maturity of the Bonds. Written or telephone
requests should be directed to the World Bank, Kokusai Building, Room 916, 1-1,
Marunouchi 3-chome, Chiyoda-ku, Tokyo 100, Japan, tel: 214-5001/2.
U.S. MARKET
The Bank is subject to certain informational requirements of Regulation BW,
promulgated by the U.S. Securities and Exchange Commission under Section 15(a)
of the Bretton Woods Agreements Act, and in accordance therewith files its
regular quarterly and annual financial statements, the annual report of the Bank
to its Board of Governors and other information with the Commission.
In addition, the Bank has filed the Information Statement described above
with the Commission. The Information Statement and such regular quarterly and
annual financial statements, reports and other information can be inspected and
copied at the offices of the Commission at Room 1026, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of such material can be obtained from the
Public Reference Section of the Commission at the above address at prescribed
rates. The Information Statement, annual reports and quarterly and annual
financial statements also may be inspected at the SEC Library of the New York
Stock Exchange.
Since May 15, 1996, Bank information has been filed with the Commission
electronically through the EDGAR system and may be found at the Internet address
http://www.sec.gov/edgarhp.htm.
GENERAL
The Information Statement, and any quarterly or annual financial statements
filed by the Bank with the Luxembourg Stock Exchange and with the Commission
pursuant to Regulation BW subsequent to the date of the Information Statement
and prior to the termination of the offering of the Bonds, shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof.
The Bank will provide without charge copies of the Information Statement and
any quarterly or annual financial statements incorporated herein by reference.
Written or telephone requests should be directed to the World Bank, 1818 H
Street, N.W., Washington, D.C. 20433, Attention: Financial Operations Department
(202) 458-0746.
DESCRIPTION OF THE BONDS
The issuance of the Bonds has been authorized by a resolution of the Bank's
Executive Directors adopted on July 30, 1996.
3
<PAGE>
The Bonds are not obligations of any government, and their terms and
conditions will contain a statement to that effect.
ORIGINAL ISSUANCE
On original issuance, all Bonds will be issued as Bookentry Bonds through
the Federal Reserve Bank of New York and held by Morgan Guaranty Trust Company
of New York and The Chase Manhattan Bank, N.A., as Holding Institutions and as
depositaries for Morgan Guaranty Trust Company of New York, Brussels branch, as
operator of the Euroclear System ("Euroclear"), and Cedel Bank societe anonyme
("Cedel"), respectively, and by the other Holding Institutions designated by
Merrill Lynch International and Swiss Bank Corporation: provided that, prior to
original issuance a purchaser may request that after original issuance its
Bookentry Bonds be exchanged for Definitive Bonds. After original issuance, all
Bookentry Bonds will continue to be held by such Holding Institutions unless a
purchaser arranges for the transfer of its Bookentry Bonds to another Holding
Institution or requests Definitive Bonds. The terms "Bookentry Bonds",
"Definitive Bonds" and "Holding Institutions" are defined below.
BOOKENTRY SYSTEM
The Federal Reserve Bank of New York will take delivery of and hold
Bookentry Bonds as record owner and custodian for other Federal Reserve Banks
and for Holding Institutions located in the Second Federal Reserve District.
Holding Institutions located in other Federal Reserve Districts can hold
Bookentry Bonds through their respective Federal Reserve Banks or Branches. A
"Holding Institution" is a depositary or other designated institution that has
an appropriate bookentry account with a Federal Reserve Bank or Branch.
Transfers of Bookentry Bonds between Holding Institutions can be made through
the Federal Reserve Communications System.
The aggregate holdings of Bookentry Bonds of each Holding Institution will
be reflected in the bookentry account of such Holding Institution with its
Federal Reserve Bank or Branch. Each Holding Institution, and each other
intermediate holder in the chain to the ultimate beneficial owner, will have the
responsibility of establishing and maintaining accounts for its customers having
interests in Bookentry Bonds. Federal Reserve Banks will be responsible only for
maintaining the bookentry accounts of Holding Institutions, effecting transfers
on their books, ensuring that payments from the Bank, through the Federal
Reserve Bank of New York, are credited to appropriate Holding Institutions and
transmitting to the Bank, through the Federal Reserve Bank of New York, any
notices received from holders of Bookentry Bonds pursuant to the provisions
described under "Events of Default". With respect to Bookentry Bonds, Federal
Reserve Banks will act only on the instructions of Holding Institutions for
which they maintain such Bookentry Bonds. The Federal Reserve Banks will not
record pledges of Bookentry Bonds.
The Bank will not impose fees in respect of Bookentry Bonds; however, owners
of Bookentry Bonds may incur fees payable in respect of the maintenance and
operation of the bookentry accounts in which such Bookentry Bonds are held.
TERMS AND CONDITIONS OF THE BONDS
The terms and conditions of the Bonds will be substantially in the following
form. Such terms and conditions will appear on each Definitive Bond and will be
available to holders of Bookentry Bonds from the Bank upon request.
1. AGGREGATE PRINCIPAL AMOUNT, FORM AND DENOMINATION
Each Bond is one of an authorized issue of Bonds in the aggregate principal
amount of $1,000,000,000 known as the 6 5/8% U.S. Dollar Global Bonds of 1996,
due August 21, 2006 of the Bank (the "Bonds").
Bonds will be available in uncertificated bookentry form ("Bookentry Bonds")
or, if a purchaser specifically so requests, in the form of registered
certificates ("Definitive Bonds"), in denominations of $1,000 or any integral
multiple thereof. Bookentry Bonds and Definitive Bonds will be interchangeable
in like aggregate principal amount without charge pursuant to the provisions of
"Exchanges and Transfers".
4
<PAGE>
2. STATUS
The Bonds constitute direct, unsecured obligations of the Bank ranking pari
passu, without any preference among themselves, with all its other obligations
that are unsecured and unsubordinated.
3. PAYMENTS OF PRINCIPAL AND INTEREST
(a) The principal of and interest on the Bonds will be payable at a
designated office or agency of the Bank in New York City in such coin or
currency of the United States of America as at the time of payment is legal
tender for public and private debts; provided that, at the Bank's option,
principal of and interest on Bookentry Bonds may be paid by credit to a Federal
Reserve Bank or Branch account of Holding Institutions holding such Bookentry
Bonds (including Morgan Guaranty Trust Company of New York ("Morgan"), as
depositary for Morgan, Brussels branch, as operator of Euroclear, and The Chase
Manhattan Bank, N.A. ("Chase"), as depositary for Cedel, for the benefit of
holders of Bonds through Euroclear and Cedel, respectively), and interest on
Definitive Bonds and, upon surrender of such Bonds, principal thereof may be
paid by draft payable through the Federal Reserve Bank of New York and mailed to
the registered holders thereof. The Federal Reserve Bank of New York, 33 Liberty
Street, New York, New York 10045, will act as the Bank's fiscal agent (the
"Fiscal Agent") for the Bonds pursuant to a Fiscal Agency Agreement.
(b) If any date for payment in respect of any Bond is not a day on which the
Federal Reserve Bank of New York is open for business (a "Federal Reserve
Business Day"), the holder thereof shall not be entitled to payment until the
next following Federal Reserve Business Day, and no further interest shall be
paid in respect of the delay in such payment.
(c) The Bonds will bear interest from and including August 21, 1996 at the
rate of 6 5/8 percent per annum, payable semi-annually in arrears on February 21
and August 21 of each year, commencing February 21, 1997. Should the Bank fail
to redeem the Bonds when due, interest shall not cease to accrue but shall
continue to accrue until the actual redemption of the Bonds but not beyond the
fifteenth day after a publication is made by the Fiscal Agent to the effect that
the necessary funds for redemption have been provided to the Fiscal Agent. Where
interest is to be calculated in respect of a period of other than one year, it
will be calculated on the basis of a 360 day year of 12 months of 30 days each
and the number of days elapsed.
4. REDEMPTION AND PURCHASE
Unless previously purchased and cancelled, the Bonds will be redeemed by the
Bank at maturity on August 21, 2006 at their principal amount. The Bonds will
not be redeemable prior to maturity. The Bank may at any time purchase Bonds at
any price in the open market or otherwise. Bonds purchased by the Bank may be
surrendered for cancellation.
5. TITLE
The Bank may deem and treat the Federal Reserve Bank of New York, in respect
of all Bookentry Bonds, and the registered owner, in respect of any Definitive
Bond, as the absolute owner thereof for all purposes whatsoever notwithstanding
any notice to the contrary; and all payments to or on the order of the Federal
Reserve Bank of New York and such registered owner, respectively, shall be valid
and effectual to discharge the liability of the Bank upon the Bookentry Bonds
and such Definitive Bond to the extent of the sum or sums so paid. As custodian
of Bookentry Bonds, the Federal Reserve Bank of New York may deem and treat
other Federal Reserve Banks and Branches, and Holding Institutions located in
the Second Federal Reserve District, holding any Bookentry Bonds as the absolute
owner thereof for all purposes whatsoever notwithstanding any notice to the
contrary; and all payments to or on the order of such Federal Reserve Banks or
Branches or Holding Institutions, as the case may be, will be valid and
effectual to discharge the responsibility of the Federal Reserve Bank of New
York with respect to such Bookentry Bonds to the extent of the sum or the sums
so paid.
6. RECORD DATE
The record date for the purpose of payment of interest or principal on the
Bonds shall be as of the close of business at the Federal Reserve Bank of New
York on (a) the day preceding any interest payment date for
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holders of Bookentry Bonds and (b) the tenth day preceding any interest payment
date for holders of Definitive Bonds. If any such day is not a Federal Reserve
Business Day, the record date shall be the next preceding Federal Reserve
Business Day.
7. EXCHANGES AND TRANSFERS
(a) Without charge, (i) Definitive Bonds may be exchanged, upon presentation
and surrender at a designated office or agency of the Bank in New York City, for
Definitive Bonds of other authorized denominations or for Bookentry Bonds of any
authorized denominations, or both, in the same aggregate principal amount; (ii)
any Definitive Bond may be transferred by the registered holder thereof, or by
his attorney-in-fact duly authorized in writing, at such office or agency upon
presentation and surrender of such Bond for cancellation, and upon any such
transfer a new Definitive Bond or Bonds, of authorized denominations and in the
same aggregate principal amount, will be issued to the transferee; and (iii)
Bookentry Bonds may be exchanged free of charge for Definitive Bonds of any
authorized denominations in accordance with procedures established for this
purpose from time to time by the Federal Reserve Bank of New York. Requests from
holders through Euroclear or Cedel for Definitive Bonds must be directed through
the respective clearing system to Morgan or Chase, respectively, as Holding
Institutions. Bookentry Bonds may be transferred between Holding Institutions,
in Federal Reserve Districts where the respective Federal Reserve Banks have
adopted appropriate procedures, in accordance with such procedures.
(b) Transfers or exchanges of Definitive Bonds or exchanges of Bookentry
Bonds for Definitive Bonds may not be effected during a period of ten days next
preceding any interest payment date.
(c) Transfers of Bookentry Bonds between holders through Euroclear or Cedel
and holders through Holding Institutions will be effected through the bookentry
accounts of Morgan and Chase as Holding Institutions with the Federal Reserve
Bank of New York, thereby increasing or decreasing their respective holdings of
the Bonds on behalf of Euroclear or Cedel. Bonds may be transferred between
participants within Euroclear and within Cedel, and between Euroclear and Cedel
participants, in accordance with procedures established for this purpose from
time to time by Euroclear and Cedel.
8. NEGATIVE PLEDGE COVENANT
As long as any of the Bonds shall be outstanding and unpaid, but only up to
the time all amounts of principal and interest have been placed at the disposal
of the Fiscal Agent, the Bank will not cause or permit to be created on any of
its property or assets any mortgage, pledge or other lien or charge as security
for any bonds, notes or other evidences of indebtedness heretofore or hereafter
issued, assumed or guaranteed by the Bank for money borrowed (other than any
purchase money mortgage or other pledge or lien on property purchased by the
Bank as security for all or part of the purchase price thereof, any lien arising
in the ordinary course of business and securing a debt maturing not more than
one year after the date on which such lien is incurred, or any extension or
renewal of any of the foregoing), unless the Bonds shall be secured by such
mortgage, pledge or other lien or charge equally and ratably with such other
bonds, notes or evidences of indebtedness.
9. EVENTS OF DEFAULT
If the Bank shall default in the payment of the principal of, or interest
on, or in the performance of any covenant in respect of a purchase fund or a
sinking fund in, any bonds (including the Bonds), notes or similar obligations
which shall have been issued, assumed or guaranteed by the Bank, and such
default shall continue for a period of 90 days, then at any time thereafter and
during the continuance of such default any holder of any of the Bonds may
deliver or cause to be delivered (in the case of Bookentry Bonds, through the
holder, if any, immediately preceding it and any other intermediate holder in
the chain to the Federal Reserve Bank of New York, and through the Federal
Reserve Bank of New York) to the Bank at its principal office in Washington,
District of Columbia, United States of America, written notice that such holder
elects to declare the principal of Bonds held by it (the serial numbers and
denominations, in the case of Definitive Bonds, and the aggregate principal
amount, in the case of Bookentry Bonds, to be specified in such notice) to be
due and payable, and on the thirtieth day after such notice shall be so
delivered to the Bank the principal of such Bonds shall become due and payable,
unless prior to that time all such defaults theretofore existing shall have been
cured.
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10. REPLACEMENT OF DEFINITIVE BONDS
If any Definitive Bond is mutilated, defaced, lost, stolen or destroyed, it
may be replaced at the office of the Fiscal Agent on payment by the claimant of
such costs as may be incurred in connection therewith and on such terms as to
evidence and indemnity as the Bank and the Fiscal Agent may require. Mutilated
or defaced Definitive Bonds must be surrendered before replacements will be
issued.
11. FURTHER ISSUES
The Bank may from time to time without the consent of the Bondholders issue
further Bonds so as to form a single issue with the Bonds.
12. NOTICES
All notices regarding the Bonds shall be published (a) in a leading daily
newspaper printed in the English language and of general circulation in London,
(b) so long as the Bonds are listed on the Luxembourg Stock Exchange, in a
leading daily newspaper in either the French or German language and of general
circulation in Luxembourg, (c) in a leading daily newspaper in the Japanese
language and of general circulation in Tokyo and (d) in a leading daily
newspaper in the English language and of general circulation in New York. It is
expected that such notices will normally be published in the Financial Times in
London, the Luxemburger Wort in Luxembourg, the Nikkei Shimbun in Tokyo and The
Wall Street Journal in New York.
13. GOVERNING LAW
The validity and the terms and conditions of the Bonds will be governed by
the law of the State of New York.
TAX MATTERS
The following is a summary of the provisions of the Articles concerning
taxation of the Bonds and of certain anticipated United States federal income,
withholding and estate tax consequences resulting from the ownership of the
Bonds. This summary does not cover all of the possible tax consequences relating
to the ownership of the Bonds and the receipt of interest thereon, and it is not
intended as tax advice to any person. It addresses only holders who are initial
purchasers of the Bonds and hold the Bonds as capital assets, and does not
address special classes of holders, such as dealers in securities or currencies,
banks, tax-exempt entities, life insurance companies, persons holding Bonds as a
hedge or hedged against interest rate or currency risks or as part of a
straddle, or holders whose functional currency is not the U.S. dollar. This
summary is based upon the United States federal income, withholding and estate
tax laws as currently in effect and as currently interpreted and does not
include any description of the tax laws of any state, local or foreign
government that may apply.
PROSPECTIVE PURCHASERS OF BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE APPLICATION OF THE UNITED STATES FEDERAL INCOME, WITHHOLDING AND
ESTATE TAX LAWS, AS WELL AS THE POSSIBLE APPLICATION OF THE TAX LAWS OF ANY
OTHER JURISDICTION, TO THEIR PARTICULAR SITUATION.
TAXATION OF THE BONDS IN GENERAL
The Bonds and the interest thereon generally will be subject to taxation,
including United States federal income taxation. Under the Articles, however,
the Bonds and the interest thereon are not subject to any tax by a member
country of the Bank (i) which tax discriminates against the Bonds solely because
they were issued by the Bank, or (ii) if the sole jurisdictional basis for the
tax is the place or currency in which the Bonds are issued, made payable or
paid, or the location of any office or place of business maintained by the Bank.
The imposition of United States federal income tax in the manner described
herein is not inconsistent with the Articles.
UNITED STATES FEDERAL INCOME TAXATION
TREATMENT OF INTEREST
Under the Internal Revenue Code of 1986, as amended (the "Code"), a holder
of a Bond who or which is (i) a United States citizen or resident alien
individual, (ii) a United States domestic corporation or
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(iii) otherwise subject to United States federal income taxation on a net income
basis in respect of a Bond (a "U.S. Holder") will be taxable on the interest
accrued or received on such Bond in accordance with such U.S. Holder's method of
accounting for United States federal income tax purposes.
The United States Treasury Department has issued to the Bank rulings dated
May 4, 1988 and May 5, 1989 (the "Rulings") regarding certain United States
federal tax consequences of the receipt of interest on securities issued by the
Bank. The Rulings provide that interest paid by the Bank on such securities,
including payments attributable to accrued original issue discount, constitutes
income from sources without the United States.
Because, under the Rulings, interest paid by the Bank is treated as income
from sources without the United States, interest paid by the Bank would
ordinarily not be subject to United States federal income tax, including
withholding tax, if paid to a nonresident alien individual (or foreign
partnership, estate or trust) or to a foreign corporation, whether or not such
person is engaged in trade or business in the United States. However, absent any
special statutory or treaty exception, such interest would be subject to United
States federal income tax in the following cases: (a) such interest is derived
by such person in the active conduct of a banking, financing or similar business
within the United States or is received by a corporation the principal business
of which is trading in stock or securities for its own account, and in either
case such interest is attributable to an office or other fixed place of business
of such person within the United States or (b) such person is a foreign
corporation taxable as an insurance company carrying on a United States
insurance business and such interest is attributable to its United States
business.
PURCHASE, SALE AND RETIREMENT OF THE BONDS
A U.S. Holder's initial tax basis in a Bond will generally be its cost. A
U.S. Holder's initial tax basis in a Bond may be adjusted in certain
circumstances, such as, in the case of an accrual basis U.S. Holder, the accrual
of interest income.
A U.S. Holder generally will recognize gain or loss on the sale or
retirement of a Bond equal to the difference between the amount realized on the
sale or retirement and the adjusted tax basis of the Bond. Except to the extent
attributable to accrued but unpaid interest, gain or loss recognized on the sale
or retirement of a Bond will be capital gain or loss and will be long-term
capital gain or loss if the Bond was held for more than one year.
Nonresident alien individuals, foreign corporations, foreign partnerships,
and foreign estates and trusts generally will not be taxable on gain or loss on
the sale or exchange of a Bond unless ownership of the Bond is effectively
connected with the conduct of a trade or business in the United States or, in
the case of a nonresident alien individual, such individual is present in the
United States for 183 or more days in the taxable year of the sale or exchange
and certain other conditions are met.
UNITED STATES FEDERAL WITHHOLDING TAX
Under the Articles, the Bank is not under any obligation to withhold or pay
any tax imposed by any member on the interest on the Bonds. The Rulings confirm
that neither the Bank nor an agent appointed by it as principal for the purpose
of paying interest on securities issued by the Bank is required to withhold tax
on interest paid by the Bank. Payments of interest and accrued original issue
discount on the Bonds will therefore be made to the Fiscal Agent without
deduction in respect of any such tax.
UNITED STATES FEDERAL ESTATE TAX
In the case of United States federal estate tax, the Rulings determined
that, unless an applicable death tax convention with a foreign country provides
otherwise, securities of the Bank are deemed to be situated without the United
States for purposes of the United States federal estate tax and are not
includible in the value of the gross estate for purposes of such tax in the case
of the estate of a nonresident of the United States who is not a citizen of the
United States.
UNITED STATES INFORMATION REPORTING AND BACKUP WITHHOLDING
The Bank is not subject to the reporting requirements that generally are
imposed by United States law with respect to certain payments of interest or
principal on debt obligations, nor is it subject to backup
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withholding obligations imposed, in certain circumstances, by United States law
with respect to such payments. While temporary regulations issued by the Service
confirm that the backup withholding requirements do not apply to any paying
agent of the Bank with respect to the Bonds, the Fiscal Agent may file
information returns with the Service with respect to payments on the Bonds made
within the United States to certain non-corporate United States persons as if
such returns were required. Under the bookentry system as operated by the
Federal Reserve Bank of New York, no such information returns will be filed by
the Fiscal Agent with respect to Bookentry Bonds.
Brokers, trustees, custodians and other intermediaries within the United
States are subject to reporting and backup withholding requirements with respect
to certain payments on the Bonds received by them for the account of certain
non-corporate United States persons, and foreign persons receiving payments on
the Bonds within the United States may be required by such intermediaries to
establish their status in order to avoid information reporting and backup
withholding by such intermediaries in respect of such payments.
VALIDITY OF THE BONDS
The validity of the Bonds will be passed upon by the Vice President and
General Counsel, a Deputy General Counsel or the Chief Counsel, Finance, of the
Bank and by Sullivan & Cromwell, counsel for the Underwriters, who, with respect
to certain matters, will rely upon the opinion of the counsel of the Bank.
MISCELLANEOUS
The Bonds will not be issued under an indenture, and no trustee is provided
for in the Bonds. Under the provisions of Section 15(a) of the Bretton Woods
Agreements Act, as amended, the Bonds are exempted securities within the meaning
of Section 3(a)(2) of the U.S. Securities Act of 1933, as amended, and Section
3(a)(12) of the U.S. Securities Exchange Act of 1934, as amended. In addition,
it is not necessary to register the Bonds under the Securities and Exchange Law
of Japan (Law No. 25 of 1948, as amended).
The Bank obtained on July 15, 1996 a designation from the Minister of
Finance of Japan which exempts, for a period of one year from the date thereof,
the Bank from filing prior notifications under the Foreign Exchange and Foreign
Trade Control Law of Japan (Law No. 228, 1949), as amended, in respect of its
offerings of securities (including the Bonds) in Japan.
UNDERWRITING AND DISTRIBUTION
The Underwriters listed below have severally agreed to purchase, and the
Bank has agreed to sell to them severally, the principal amount of Bonds set
forth below opposite their names.
<TABLE>
<CAPTION>
NAME PRINCIPAL AMOUNT
- ------------------------------------------------------------------------------------------------ ----------------
<S> <C>
Merrill Lynch International..................................................................... $ 324,500,000
Swiss Bank Corporation ......................................................................... 324,500,000
Banque Paribas.................................................................................. 27,000,000
CS First Boston Limited......................................................................... 27,000,000
Deutsche Bank AG London......................................................................... 27,000,000
Goldman, Sachs & Co............................................................................. 27,000,000
IBJ International plc........................................................................... 27,000,000
Lehman Brothers International (Europe).......................................................... 27,000,000
Midland Bank plc................................................................................ 27,000,000
J.P. Morgan Securities Ltd. .................................................................... 27,000,000
Morgan Stanley & Co. International Limited...................................................... 27,000,000
Nikko Europe Plc................................................................................ 27,000,000
Nomura International plc........................................................................ 27,000,000
Tokyo-Mitsubishi International plc.............................................................. 27,000,000
UBS Securities LLC.............................................................................. 27,000,000
----------------
Total................................................................................. $ 1,000,000,000
----------------
----------------
</TABLE>
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The Underwriters propose to offer the Bonds to the public at the offering
price set forth on the cover page hereof.
The Underwriters have agreed to purchase the Bonds from the Bank at a
purchase price of 98.87% of their principal amount, which includes an
underwriting discount of 0.325%. Merrill Lynch International and Swiss Bank
Corporation, as representatives of the Underwriters, may offer Bonds to certain
dealers who are not members of the underwriting group at a price which
represents a concession not in excess of 0.30% of the principal amount under the
public offering price.
The Underwriting Agreement provides that the obligations of the several
Underwriters are subject to certain conditions, including approval of certain
legal matters by counsel and receipt by the Underwriters of a certificate of a
principal officer of the Bank to the effect that prior to the closing date there
has been no material adverse change in the condition of the Bank from that set
forth in this Prospectus. In addition, either the Bank or the Underwriters may
terminate the Underwriting Agreement in the event of certain national or
international political or economic events that, in the judgment of the
representatives of the Underwriters or the Bank, would materially adversely
affect the ability of the Underwriters to market the Bonds.
Each of the Underwriters has agreed that it will not offer, sell or deliver
any of the Bonds, directly or indirectly, or distribute this Prospectus or any
other offering material relating to the Bonds, in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof.
LISTING AND CLEARING
Application is being made to list the Bonds on the Luxembourg Stock Exchange
and the New York Stock Exchange. Banque Paribas Luxembourg will be appointed the
Bank's Special Agent and Listing Agent in Luxembourg for the Bonds. So long as
the Bonds are listed on the Luxembourg Stock Exchange, there will be a Special
Agent in Luxembourg. The Bonds have been accepted for clearing through Euroclear
and Cedel and have been assigned Common Code 6894445, ISIN no. US459056PJ03 and
CUSIP no. 459056PJ0.
USE OF PROCEEDS
The net proceeds to the Bank from the sale of the Bonds will be used in the
general operations of the Bank.
PRINCIPAL INFORMATION CONCERNING THE BANK
EXCEPT AS OTHERWISE INDICATED, ALL NUMERICAL DATA ARE AS OF JUNE 30, 1996.
The Bank is an international organization, the principal purpose of which is
to promote the economic development of its member countries, primarily by
providing loans and related technical assistance for specific projects and for
programs of economic reform in developing member countries. The Bank was
established and has been operating since 1946 under Articles of Agreement (the
Articles) signed by the governments of its member countries. The Bank's capital
stock is owned by its member countries, which numbered 180 as of August 14,
1996.
ASSETS
The Bank's principal asset is its portfolio of outstanding loans ($110.2
billion) made to support economic development in member countries. The loan
portfolio is diversified by country and sector. All loans are either made to or
guaranteed by a member country, with the exception of loans made to the
International Finance Corporation (IFC), a legally separate institution
affiliated with the Bank through largely common ownership. No loans are made
which, in the Bank's opinion, cannot be justified on economic grounds or which
would be for countries not deemed creditworthy. The creditworthiness of all
borrowers is kept under continuous review.
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The Bank provides loans and guarantees. The Bank offers three types of
loans: currency pool loans, fixed-rate single currency loans and floating-rate
single currency loans. Single currency loans were offered in 1993 as a pilot
program and beginning in May 1995 as a standard product. All loans carry a
multi-year grace period and thereafter amortize over a period that in most cases
ranges from 12 to 20 years.
CURRENCY POOL LOANS. The currency composition of currency pool loans is
determined on the basis of a pool, which provides a currency composition that is
the same for all loans in the pool. Pursuant to a policy established by the
Bank's Executive Directors in 1989 and confirmed in June 1996, at least 90% of
this pool is in fixed currency ratios of one U.S. dollar to 125 Japanese yen to
two Deutsche mark equivalent.
The lending rate on these loans is variable, adjusted every six months to
reflect the semester-average interest cost of outstanding borrowings allocated
to fund these loans, weighted by the composition of the currency pool. The Bank
adds its standard spread of 1/2 of 1% to that average interest cost.
As of June 30, 1996, $92,527 million of disbursed and outstanding loans and
$44,307 million of undisbursed loans carried these terms. For interest payment
periods from July 1 through December 31, 1996, the applicable lending rate is
6.94%.
SINGLE CURRENCY LOANS. The Bank currently offers single currency loans in
U.S. dollars, Japanese yen, Deutsche mark, French francs, pounds sterling, Swiss
francs and Netherlands guilders and will consider borrower requests for such
loans in other currencies.
Fixed-rate single currency loans carry a lending rate that is set on
semi-annual rate fixing dates and that applies to all amounts disbursed during
the preceding six months. The lending rate is comprised of a base rate, which
reflects the market interest rates for the applicable currency on the
rate-fixing date for the equivalent loan maturity, plus a spread. The spread
consists of (a) the Bank's funding cost margin relative to the base rate for
funding allocated to these loans, (b) a risk premium to compensate the Bank for
market risks it incurs in funding these loans and (c) the Bank's standard spread
of 1/2 of 1%. As of June 30, 1996, $1,307 million in fixed rate single currency
loans in U.S. dollars and French francs was disbursed and outstanding; $2,335
million was undisbursed.
Floating-rate single currency loans carry a lending rate that is reset
semiannually. The lending rate consists of a base rate, which is the prevailing
six month interbank offered rate for the applicable currency on the loan's rate
reset date, plus a spread. The spread consists of (a) the Bank's average cost
margin for funding allocated to these loans relative to the base rate, plus (b)
the Bank's standard spread of 1/2 of 1%. As of June 30, 1996, $957 million in
floating-rate single currency loans in U.S. dollars was disbursed and
outstanding; $7,387 million was undisbursed. For those loans whose rate reset
date fell on July 15, 1996, the applicable lending rate for U.S. dollars was
6.14%.
In addition to its other loan products, beginning on September 1, 1996, the
Bank will offer its borrowers the option to convert undisbursed currency pool
loan amounts to single currency loan terms. Further, borrowers will be given the
option to convert disbursed and undisbursed currency pool loan balances to
single currency pool loans. Borrowers selecting single currency pool loans will
have their choice of four different pools (U.S. dollars, Japanese yen, Deutsche
mark or Swiss francs) each of which will be a multi-currency pool at inception,
but will be adjusted to reach a level of at least 90 percent in the designated
currency by July 1, 1999 and will be maintained at or above that level
thereafter.
GUARANTEES. The Bank also issues partial guarantees covering a range of
risks, as a catalyst to support loans made by private financial institutions and
capital market borrowings. Any payments made by the Bank under a called
guarantee would result in a repayment obligation to the Bank from the relevant
member country. As of June 30, 1996, the Bank's exposure on its guarantees
(i.e., the present value in terms of their first call date) was $1,057 million;
the face value of such guarantees was $1,537 million, of which $122 million was
subject to call.
The Bank does not differentiate among borrowers in the spread of 1/2 of 1%
it charges on its outstanding loans. In addition, all loans carry a commitment
charge of 3/4 of 1% per annum on undisbursed amounts. The Bank currently
collects a fee of 25 basis points on its exposure on guarantees.
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On August 1, 1996, the Executive Directors approved a one-year waiver of 25
basis points of interest owed by all eligible borrowers for all payment periods
commencing in the fiscal year ending June 30, 1997. The same waiver was in
effect for the fiscal year ended June 30, 1996. On the same date, the Executive
Directors also approved a one-year waiver of 50 basis points of the commitment
charge owed on undisbursed portions of loans made to or guaranteed by members. A
borrower is eligible for an interest waiver if it has serviced all of its Bank
loans within 30 days of due dates that occurred during the six months preceding
the waiver date.
On August 1, 1996, the Executive Directors allocated $250 million of the net
income earned in the fiscal year ended June 30, 1996 (FY96) to the General
Reserve. The Executive Directors also recommended to the Board of Governors
that: (a) an amount equivalent to $600 million in SDRs as of June 30, 1996 be
transferred as an immediate grant to the International Development Association,
$300 million to be transferred out of FY96 net income and $300 million from
surplus; and (b) any excess of net income earned in FY96 be retained as surplus
provided that, of the resulting total amount in surplus, expected to be $1,047
million, amounts of up to $500 million be transferred from surplus, by way of
grant, to a trust fund for Heavily Indebted Poor Countries (HIPCs) or other
arrangements under consideration in support of the HIPC Debt Initiative when
other creditors of eligible beneficiary countries are determined by the Bank to
have agreed to meet their share of the costs envisaged within the framework of
this initiative.
Most Bank loans are for specific projects. In addition, the Bank makes
structural adjustment and sectoral adjustment loans which are designed to
support the introduction of basic changes in economic, financial and other
policies of key importance for the economic development of member countries,
instead of relying exclusively on the impact of a series of project operations
supplemented by economic work at the macroeconomic level. Structural adjustment
loans support general reforms of policies and institutions, while sectoral
adjustment loans are made to achieve structural adjustment for a particular
sector. The Bank also makes rehabilitation loans to support economic adjustment
of transition economies. Current operating guidelines in this area provide that
such loans will not exceed 25% of Bank lending by a significant amount in any
fiscal year without a reexamination of this area by the Bank's Executive
Directors.
Under the Articles as applied, the total amount outstanding of callable
guarantees, participations in loans and direct loans made by the Bank may not be
increased to an amount exceeding 100% of the sum of subscribed capital, reserves
and surplus. Reserves and surplus correspond to the items on the Bank's Balance
Sheet labelled "Retained Earnings", "Cumulative Translation Adjustment" and
"Accumulated Provision for Loan Losses". As of June 30, 1996, such total amount
was $110.4 billion, or 54.9% of such sum. The Bank's Executive Directors have
issued guidelines pursuant to which all guarantees issued by the Bank will be
counted towards this limit at the time they may first become callable
irrespective of the likelihood of an actual call.
In March 1991, the Executive Directors decided that discussions on an
additional capital increase would be initiated if the Bank's lending commitments
during any fiscal year reach 80% of the sustainable level of lending (the
commitment level that in the Bank's judgment could be sustained by it without
the need for additional capital). The Bank's lending commitments for the fiscal
year ended June 30, 1996 were $14.7 billion, or 49.5% of the sustainable level
of lending.
The Bank does not reschedule interest or principal payments on its loans or
participate in debt rescheduling agreements with respect to its loans. In
exceptional cases, however, such as when implementation of a financed project
has been delayed, the loan amortization schedule may be modified to avoid
substantial repayments prior to project completion. In addition, on March 12,
1996, based on a precedent established by the Bank in 1975 after Bangladesh
became independent from Pakistan, the Bank's Executive Directors authorized the
Bank in the special case of Bosnia and Herzegovina to enter into an agreement
with that country with respect to a plan for the clearance of arrears under
loans to the former Socialist Federal Republic of Yugoslavia (SFRY) for which
Bosnia and Herzegovina accepts liability. The Bank's Executive Directors
required agreement on a plan to this effect as a condition to Bosnia and
Herzegovina's membership in the Bank. On June 14, 1996, the accumulated arrears
on loans to the former SFRY assumed by Bosnia and Herzegovina were cleared
through three new consolidation loans extended by the Bank. These new
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loans consolidated all outstanding principal and overdue interest on the loans
assumed by Bosnia and Herzegovina. All three consolidation loans have a final
maturity of 30 years, which includes a five-year grace period. The consolidation
loans aggregated the existing assumed loans which had final maturities ranging
from April 1, 1992 to May 15, 2001.
The Bank's special treatment of the case of Bosnia and Herzegovina was based
on the following criteria: the country has emerged from a current or former
member of the Bank; it is assuming responsibility for a share of the debt of
such member; because of a major armed conflict in its territory involving
extensive destruction of physical assets, it has limited creditworthiness for
servicing the debt it is assuming; and a refinancing/rescheduling would result
in a significant improvement in its repayment capacity, if appropriate
supporting measures are taken. The Bank does not believe any countries other
than Bosnia and Herzegovina meet such criteria at present.
As of June 30, 1996, loans made to or guaranteed by six member countries of
the Bank (Bosnia and Herzegovina, Iraq, Liberia, Sudan, Syrian Arab Republic and
Zaire) and one other country -- the Federal Republic of Yugoslavia (Serbia and
Montenegro) -- were in nonaccrual status. The aggregate principal balance
outstanding in respect of these loans was $2,520 million, of which $1,227
million was overdue. As of such date, overdue interest and other charges in
respect of these loans totalled $808 million, of which
$188 million had been excluded from net income for the fiscal year ended June
30, 1996. No principal installments payable to the Bank on loans other than
those in nonaccrual status were overdue by more than three months. In connection
with the Bosnia and Herzegovina arrears clearance, the Bank has decided that the
new consolidation loans to that country will remain in nonaccrual status until a
suitable period of payment performance has elapsed.
In February 1993, the Bank's Executive Directors decided that the SFRY had
ceased to be a member of the Bank and that the Republic of Bosnia and
Herzegovina, the Republic of Croatia, the former Yugoslav Republic of Macedonia,
the Republic of Slovenia and the Federal Republic of Yugoslavia (Serbia and
Montenegro) (FRY) were authorized to succeed to the SFRY's membership when
certain requirements were met, including entering into a final agreement with
the Bank on the Bank's loans made to or guaranteed by the SFRY which the
particular successor Republic assumed.
Four of the five successor Republics -- the Republics of Croatia and
Slovenia, Bosnia and Herzegovina, and the former Yugoslav Republic of Macedonia
- -- have since become members of the Bank. With respect to the FRY, in February
1993 the Bank reached an agreement with that Republic for the apportionment and
service of debt due to the Bank on loans made to or guaranteed by the SFRY and
assumed by the FRY, which confirmed a February 1992 interim agreement between
the SFRY (then consisting of the Republics of Bosnia and Herzegovina, Macedonia,
Montenegro and Serbia) and the Bank pertaining, among other things, to such
loans. As of June 30, 1996, no debt-service payments had been received by the
Bank from the FRY.
The Bank determines the loan loss provision based on an assessment of
collectibility risk in the total loan portfolio, including loans in nonaccrual
status. As of June 30, 1996, the accumulated loan loss provision was $3,340
million (approximately 3% of the overall portfolio).
In April 1991, the Bank's Executive Directors adopted a policy to assist
members with protracted arrears to the Bank in mobilizing sufficient resources
to clear their arrears and to support a sustainable growth-oriented adjustment
program over the medium term. Under this policy, the Bank will develop a lending
strategy and process loans, but not sign or disburse such loans, during a
pre-clearance performance period with respect to members that (1) agree to and
implement a medium-term growth-oriented structural adjustment program agreed
with the Bank, (2) undertake a stabilization program endorsed or supported by
the IMF, where the member has significant arrears to the IMF, (3) agree to a
financing plan to clear arrears fully to the Bank in the context of the
structural adjustment program and (4) make debt service payments on a current
basis on Bank loans during the performance period. The signing, effectiveness
and disbursement of such loans will not take place until the member's arrears to
the Bank have been fully cleared. An exception was made in the case of Peru,
permitting Bank loans to be signed prior to full arrears clearance in March 1993
so the loans could be submitted to the Peruvian Congress for approval in
accordance with Peruvian law.
13
<PAGE>
The Bank's other major asset is its cash and liquid investments of $15.9
billion (including investments of $1.2 billion held to maturity). The Bank has a
policy of targeting fiscal year-end liquid holdings of at least 45% of its
projected net cash requirements for the succeeding three years, in order to
assure flexibility in its borrowing decisions. As of June 30, 1996, such
liquidity ratio was 42.5%; liquidity was also equivalent to approximately 16.2%
of its outstanding borrowing after swaps. The Bank's cash and liquid investments
are invested principally in obligations of governments and other official
entities, time deposits and other obligations issued or unconditionally
guaranteed by banks and financial institutions, and futures and options
contracts pertaining to such obligations.
LIABILITIES, EQUITY AND PROFITABILITY
The Bank's net borrowings ($96.7 billion) were denominated in 22 currencies
or currency units. The Bank has borrowed in all of the world's major capital
markets and diversifies its borrowings by currency, country, source, and
maturity to provide maximum flexibility in funding.
As of June 30, 1996, the Bank's authorized capital was 1,558,478 shares,
equal to $188.0 billion, of which 1,497,325 shares, equal to $180.6 billion, had
been subscribed. This includes capital increases in April 1988, June 1991 and
April 1992 aggregating 738,748 shares, equal to $89.1 billion, of which 712,747
shares, equal to $86.0 billion, had been subscribed.
Of the Bank's subscribed capital as of June 30, 1996, $11.0 billion (6.1%)
had been paid in, of which $8.0 billion was available for lending. Members are
obligated on the uncalled portion of their subscriptions ($169.6 billion), which
may only be called to meet obligations of the Bank for money borrowed or on any
guarantees; it may not be used for making loans. The callable capital of the
twenty industrialized member countries which are also members of the Development
Assistance Committee of the OECD was $98.3 billion (100.1% of outstanding
borrowings after swaps).
The Bank seeks to avoid exchange risks by matching its liabilities in
various currencies with assets in those same currencies and by matching the
currencies of its reserves with those of its outstanding loans.
The Bank has earned profits in every year since 1947.
14
<PAGE>
CAPITALIZATION
The following table shows the funding and the equity of the Bank as of June
30, 1996 in millions of U.S. dollars:
<TABLE>
<S> <C> <C>
FUNDING (AFTER SWAPS)
Short-term
Payable in:
U.S. dollars........................................................ $ 4,286
Deutsche mark....................................................... 74
---------
Sub-total......................................................... 4,360
Less -- Net unamortized discounts................................... 32 $ 4,328
---------
Medium- and long-term
Payable in:
Japanese yen........................................................ 30,048
U.S. dollars........................................................ 26,234
Deutsche mark....................................................... 26,435
Swiss francs........................................................ 7,538
Other currencies.................................................... 3,566
---------
Sub-total......................................................... 93,821
Less -- Net unamortized discounts................................... 13 $ 93,808
--------- ---------
Total................................................................. $ 98,136
---------
---------
EQUITY
Subscribed capital stock1............................................... $ 180,630
Less -- Uncalled portion of subscriptions............................... 169,636
---------
Capital stock paid
Available for lending............................................... 7,974
Not available for lending........................................... 3,020 10,994
---------
Deferred amounts to maintain value of currency holdings of paid-in
capital stock.......................................................... 136
Payments on account of pending subscriptions............................ 15
Retained earnings2...................................................... 16,099
Cumulative translation adjustment....................................... 1,056
---------
Total................................................................. $ 28,300
---------
---------
</TABLE>
- ------------------------
(1) The capital stock of the Bank is expressed in U.S. dollars and valued with
reference to the Special Drawing Right of the International Monetary Fund on
a fixed basis of 1.20635 U.S. dollars for one Special Drawing Right.
(2) Includes Special Reserve, General Reserve, Surplus and Unallocated Net
Income.
15
<PAGE>
SUMMARY OF BALANCE SHEETS
JUNE 30, 1996 AND JUNE 30, 1995
(IN MILLIONS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
ASSETS
Due from banks...................................................................... $ 639 $ 589
Investments......................................................................... 16,170 21,024
Securities purchased under resale agreements........................................ 1,282 246
Nonnegotiable, noninterest-bearing demand obligations on
account of subscribed capital...................................................... 1,765 1,610
Receivable to maintain value of currency holdings................................... 732 1,106
Receivable from currency swaps...................................................... 18,010 16,735
Receivable from investment securities traded........................................ 2,365 1,762
Receivable from covered forwards.................................................... 204 1,307
Other receivables................................................................... 2,219 2,697
Loans outstanding................................................................... 110,246 123,499
Accumulated provision for loan losses............................................... (3,340) (3,740)
Other assets........................................................................ 1,712 1,744
------------- -------------
Total Assets.................................................................... $ 152,004 $ 168,579
------------- -------------
------------- -------------
LIABILITIES AND EQUITY
LIABILITIES
Short-term borrowings............................................................... $ 4,328 $ 3,898
Medium- and long-term borrowings.................................................... 92,391 104,392
Securities sold under agreements to repurchase and payable
for cash collateral received....................................................... 2,439 2,567
Payable to maintain value of currency holdings...................................... 4 24
Payable for currency swaps.......................................................... 19,427 19,985
Payable for investment securities purchased......................................... 1,508 2,231
Payable for covered forwards........................................................ 202 1,306
Payable for Board of Governors-approved transfers................................... 205 135
Other liabilities................................................................... 3,200 3,580
------------- -------------
Total Liabilities............................................................... 123,704 138,118
------------- -------------
------------- -------------
EQUITY
Capital stock
Authorized (1,558,478 shares -- June 30, 1996; 1,525,248 shares -- June 30,
1995), Subscribed (1,497,325 shares -- June 30, 1996; 1,462,574 shares -- June
30, 1995)...................................................................... 180,630 176,438
Less uncalled portion of subscriptions.......................................... 169,636 165,580
------------- -------------
10,994 10,858
Deferred amounts to maintain value of currency holdings of paid-in capital stock.... 136 770
Payments on account of pending subscriptions........................................ 15 23
Retained earnings................................................................... 16,099 15,502
Cumulative translation adjustment................................................... 1,056 3,308
------------- -------------
Total Equity.................................................................... 28,300 30,461
------------- -------------
Total Liabilities and Equity........................................................ $ 152,004 $ 168,579
------------- -------------
------------- -------------
</TABLE>
16
<PAGE>
SUMMARY STATEMENTS OF INCOME
FOR THE FISCAL YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995
(IN MILLIONS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
JUNE 30, JUNE 30,
1996 1995
----------- -----------
<S> <C> <C>
Income
Loans..................................................................................... $ 7,922 $ 8,187
Investments...............................................................................
Trading............................................................................... 621 1,026
Held-to-maturity...................................................................... 100 78
Income from securities purchased under resale agreements.................................. 66 61
Other Income.............................................................................. 11 10
----------- -----------
Total Income...................................................................... 8,720 9,362
----------- -----------
Expenses
Borrowings................................................................................ 6,570 6,944
Interest on securities sold under agreements to repurchase
and payable for cash collateral received................................................. 67 83
Administrative expenses................................................................... 733 842
Provision for loan losses................................................................. 42 12
Other expenses............................................................................ 8 8
----------- -----------
Total expenses.................................................................... 7,420 7,889
----------- -----------
Operating Income.............................................................................. 1,300 1,473
Less contributions to special programs........................................................ 113 119
----------- -----------
Net Income.................................................................................... $ 1,187 $ 1,354
----------- -----------
----------- -----------
</TABLE>
17
<PAGE>
[LOGO]
PRINTED ON RECYCLED PAPER
<PAGE>
INTERNATIONAL BANK FOR RECONSTRUCTION 1818 H Street, N.W. (202) 477-1234
AND DEVELOPMENT Washington, D.C. 20433 Cable Address
U.S.A. INTBAFRAD
August 21, 1996
Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
Swiss Bank Corporation
Swiss Bank House
1 High Timber Street
London EC4V 3SB
As Representatives of the several Underwriters
6-5/8% U.S. DOLLAR GLOBAL BONDS OF 1996, DUE AUGUST 21, 2006
Dear Sir or Madam:
I have reviewed the proceedings of the International Bank for
Reconstruction and Development (the "Bank") to authorize the issue and sale
of $1,000,000,000 6-5/8% U.S. Dollar Global Bonds of 1996, due August 21,
2006 (the "Securities"), in bookentry and certificated form. In connection
with such review, I have examined, among other things:
(a) the Articles of Agreement, By-Laws and Rules of Procedure
for Meetings of the Executive Directors of the Bank;
(b) the letter dated July 17, 1996 from David A. Lipton,
Assistant Secretary, International Affairs, of the U.S.
Department of Treasury, to the Bank stating that the
Government of the United States has approved the raising of
funds by the Bank by the offer of securities in the markets
inside and outside the United States;
(c) the letter dated July 22, 1996 from the Ministry of Finance
of Japan, notifying the Bank of the approval by the
Government of Japan of borrowings by the Bank in the markets
inside Japan in currencies other than Japanese yen and of
its agreement to the conversion of the proceeds of such
borrowings;
(d) the letter dated January 29, 1982 from the Government of the
United Kingdom notifying the Bank of the approval by said
Government of borrowings by the Bank in currencies other
than pounds sterling and of its agreement to the conversion
of the proceeds of such borrowings;
(e) the communication dated July 15, 1996 from the Minister of
Finance of Japan, which exempts the Bank, for a period of
one year from the date thereof, from the filing of prior
notifications under the Foreign Exchange and Foreign Trade
Control Law of Japan (Law No. 228 of 1949, as amended), in
respect of the Bank's offerings of securities in Japan;
<PAGE>
- 2 -
(f) Resolution No. 96-3, adopted by the Executive Directors of
the Bank at a meeting held on July 30, 1996, and now in
effect, which is applicable to the issue of the Securities
and authorizes the Bank (a) to borrow from time to time in
various markets and in various currencies or currency units,
and (b) to repurchase, redeem and prepay securities issued
by the Bank, as specified therein;
(g) the form of definitive registered Securities approved pursuant to
Resolution No. 96-3 by Gary L. Perlin, Vice President and
Treasurer of the Bank, on August 21, 1996;
(h) the Underwriting Agreement dated August 14, 1996 between the
Bank and the Underwriters named therein relating to the sale
of the Securities;
(i) the letter dated August 21, 1996 from the Bank to the
Federal Reserve Bank of New York ("FRBNY") requesting FRBNY
to act as Fiscal Agent with respect to the Securities; and
(j) the Fiscal Agency Agreement dated as of November 30, 1983
between the Bank and FRBNY, as supplemented and amended.
I am of the opinion that the Bank is an international organization duly
established and existing under its Articles of Agreement; that such
Underwriting Agreement has been duly authorized, executed and delivered by
the Bank; that the Bank has obtained all governmental approvals required
pursuant to said Articles of Agreement in connection with the offering, issue
and sale of the Securities; that the Bank has received an exemption from the
need for authorization from the Minister of Finance of Japan pursuant to the
Foreign Exchange and Foreign Trade Control Law of Japan (Law No. 228 of 1949,
as amended) to offer, issue and sell its debt securities in Japan, and no
other Japanese governmental approvals are required in connection with the
offering, issue and sale of the Securities; that the creation, issue, sale
and delivery of the Securities, and the execution of Securities in definitive
registered form, have been duly authorized, the Securities have been duly
issued and delivered in bookentry form, and the Securities in bookentry form
constitute, and when executed, authenticated, issued and delivered the
Securities in definitive registered form will constitute, valid and legally
binding obligations of the Bank in accordance with their terms; and that
under existing law it is not necessary in connection with the public offering
and sale of the Securities to register the Securities under the U.S.
Securities Act of 1933, as amended, to qualify an indenture with respect
thereto under the U.S. Trust Indenture Act of 1939, as amended, or to
register the Securities under the Securities and Exchange Law of Japan (Law
No. 25 of 1948, as amended).
In rendering the foregoing opinion, I have, with your approval, assumed
that signatures on all documents examined by me are genuine.
Sincerely yours,
/s/ Daoud L. Khairallah
Daoud L. Khairallah
Deputy General Counsel
Administration, Finance and Institutional Affairs
<PAGE>
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
and
FEDERAL RESERVE BANK OF NEW YORK
Supplement No. 66
to
Fiscal Agency Agreement
dated as of November 30, 1983
Dated as of August 21, 1996
<PAGE>
Supplement No. 66, dated as of August 21, 1996, to the Fiscal Agency
Agreement, dated as of November 30, 1983, between the International Bank for
Reconstruction and Development (hereinafter the "Bank") and the Federal
Reserve Bank of New York (hereinafter "Federal").
1. Schedule A of the Fiscal Agency Agreement, dated as of November 30, 1983,
between the Bank and Federal, as heretofore amended, is hereby further
amended and supplemented by adding thereto the following:
"6 5/8% U.S. Dollar Bonds of August 21, 1996, due August 21, 2006, of the
Bank."
2. Said Fiscal Agency Agreement, as so amended and supplemented, is hereby
in all respects ratified, confirmed and approved.
IN WITNESS WHEREOF, the Bank and Federal by their duly authorized
officers have executed this Supplement No. 66 to the Fiscal Agency Agreement
as of the day and year first above written.
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
By: /s/ Deborah J. Danker
----------------------------------
Deborah J. Danker
Acting Director
Financial Operations Department
Attest:
/s/ Shengman Zhang
- ----------------------------
Shengman Zhang
Vice President and Secretary
FEDERAL RESERVE BANK OF NEW YORK
By: /s/George W. [ILLEGIBLE]
----------------------------------
Attest:
/s/ Howard [ILLEGIBLE]
- -----------------------------
<PAGE>
INTERNATIONAL BANK FOR RECONSTRUCTION 1818 H Street, N.W. (202) 477-1234
AND DEVELOPMENT Washington, D.C. 20433 Cable Address
U.S.A. INTBAFRAD
FILE NO. 1-3431
REGULATION BW
RULE 3
August 21, 1996
VIA EDGAR
Securities and Exchange Commission
File Desk, Room 1004
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
Attached please find a report dated August 21, 1996 of the International
Bank for Reconstruction and Development (the "Bank") under Rule 3 of
Regulation BW ("Rule 3") with respect to the Bank's 6-5/8% U.S. Dollar Global
Bonds of 1996, due August 21, 2006 (the "Securities"). Please note that the
information contained in Exhibits B and D to this report supersedes the
information filed as Exhibits B and D to the Bank's report under Rule 3
relating the Securities dated August 14, 1996.
Sincerely yours,
Daoud L. Khairallah
Deputy General Counsel
Administration, Finance and Institutional Affairs
Enclosures
