World Bank Announces US $3 Billion Electronic Bond Offering; The bond market's first fully-integrated on-line bond offering

Business Wire, Jan 6, 2000

Business Editors

WASHINGTON--(BUSINESS WIRE)--Jan. 6, 2000

The World Bank today announced its intention to launch the first fully integrated global electronic bond offering - to be offered, distributed and traded on-line. The offering is expected to be a minimum of US$3 billion. Lead managers will be Goldman, Sachs & Co. and Lehman Brothers.

The transition is the most comprehensive internet new debt issue structure to date combining the following key features:

-- Electronic Syndicate - all underwriters may offer bonds on-line

Internet structure is available to the entire syndicate,

including specialist electronic dealers.

-- Electronic distribution to US Middle Market and Retail Accounts

provides investor diversification

Leading on-line electronic brokerage firms, including Fidelity

and Schwab, will participate for the first time in a global bond

issue as underwriters alongside traditional leading global bond

houses.

-- Electronic Order Entry and Allocation

Investors will be able to input orders on-line which can then be

aggregated through an electronic syndicate allocation management

system. This will enable the World Bank to monitor the

book-building process in real time.

- Electronic secondary trading

Secondary market trading will be enhanced through Goldman Sachs'

proprietary on-line trading system (Web.ET). Additionally, Lehman

Brothers' will offer its proprietary on-line trading system by

March. Other market participants' platforms are expected to be

added in the coming weeks.

-- Electronic dissemination of all new issue information

To institutional investors by the Bond Hub, Goldman Sachs

Financial Workbench and Lehman Brothers' Client Access Site. To

US and other eligible retail investors via Schwab and Fidelity

respective networks.

"We designed this first comprehensive, end-to-end global internet offering to set a new standard in the market in terms of market reach, liquidity and transparency," said Afsaneh Mashayekhi Beschloss, Vice-President and Treasurer of the World Bank.

"The integration of internet technology offers an excellent opportunity to broaden the distribution of securities and improve efficiency in secondary market trading," said Gumersindo Oliveros, Director of Treasury Finance at the World Bank.

Michael P. Mortara, Co-head of Global Fixed Income, Currency and Commodities of Goldman Sachs commented, "We're delighted to lead this milestone offering, a first in applying on-line technology to investor distribution and secondary trading, and entirely in keeping with the World Bank's commitment to market innovation."

Lehman Brothers' Jeffrey Vanderbeek, Global Head of Fixed Income commented, "We are very pleased to be leading what is the first comprehensive internet securities offering. With this innovative transaction, the World Bank leverages the rapid development of e-commerce in the capital markets and enhances the investor distribution process and secondary market trading in World Bank global bonds."

"Individual investors have long sought to participate in World Bank offerings but have had few opportunities or venues to do so," said John Ladensack, Senior Vice President, Fixed Income, Charles Schwab & Co., Inc. "Internet technology has opened new delivery channels for retail bond investors and we applaud the World Bank for leading the way for a host of other world class issuers."

Fidelity Investments' Robert P. Mazzarella, President of Fidelity Brokerage Services Inc. and President of Fidelity Institutional Brokerage Group, stated, "This transaction is a great step forward in developing further US retail demand for the World Bank's debt securities and represents an exciting new product for Fidelity. Distribution over the Internet is the key to expanding distribution of debt securities to the retail sector and through the Lehman Brothers'/Fidelity alliance we are delighted to be a part of the World Bank's initiative to lead the way in this development."

The World Bank, officially known as the International Bank for Reconstruction and Development (IBRD), has been issuing debt securities in the international capital markets for more than 50 years. It executed the first swap in international capital markets in 1981 and launched the first global bond in 1989. Over the years, the World Bank has been at the forefront of opening and developing new markets for issuance and has pioneered a broad array of structured financing products in capital markets. World Bank debt securities are the funding source for development loans and have provided financing for more than 4,000 development projects in 130 countries through $300 billion in lending.

Goldman Sachs is a leading global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide to a substantial and diversified client base, which includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.