Announcement of World Bank Issues Bond in Colombian Pesos on March 30, 2004

Colombia: World Bank Issues Bond In Colombian Pesos Contacts: Kenneth Lay 202-458-0774 Klay@worldbank.org Hiroshi Tsubota 202-477-2873 Htsubota@worldbank.org Bogotá, March 30, 2004. The International Bank for Reconstruction and Development (IBRD), better known as the World Bank, launched today its first bond issue in Colombian pesos. The bonds, for an amount of COP 535.6 billion (about USD $200 million), will mature on September 30, 2010. The coupon is linked to the Colombian consumer price index (CPI), and will offer a spread of 4.40% over this index. The issue was 3.56 times oversubscribed, with bids received for a total of COP 1.9 billion. This bond issue is a milestone for the World Bank. Although the institution has issued bonds in other Latin American currencies such as Mexican peso, Chilean peso and Brazilian reals, this Colombian peso transaction is the first placed exclusively in a domestic market in Latin America. In addition, it is the first World Bank bond issue listed on a Latin American stock exchange - the Bolsa de Valores de Colombia. Previous bond issues in Latin American currencies have been placed and listed in markets outside the region. According to Doris Herrera-Pol, Manager of Capital Market Operations of the World Bank Treasury, “this transaction is in the best tradition of our institution as a cooperative endeavor among the countries that are its shareholders. Colombia has been a major user of World Bank financing for its own growth and development, so it is especially gratifying that it is now at a point at which it can open its market to help finance the World Bank itself.” Colombia is one of the largest users of World Bank financing in Latin America, with outstanding loans of USD 3.1 billion equivalent, 22 projects in implementation pending nearly USD 800 million in disbursements, and a country assistance strategy that provides for an additional USD 1.7 billion of financing over the next three years. The World Bank has also supported Colombia with technical assistance in several areas, including the implementation of a capital market development program aimed at modernizing Colombia’s capital markets and strengthening market institutions. At the same time, this Colombian peso bond issue by the World Bank is an important transaction for the Colombian market. It demonstrates the level of development in terms of depth, breadth and liquidity, attained by the local capital market. It also reflects the advances made in the process of institutionalization of savings through important regulatory changes that have expanded the investor base, increased the efficiency of investment vehicles, and enhanced investor confidence. The World Bank bonds will support the further development of the market as a new regulation has been announced to accommodate for higher participation of foreign assets in pension fund portfolios, which is expected to provide important portfolio diversification benefits. The issue proceeds will be used in the general operations of the World Bank, whose mandate is to promote sustained economic development and reduce poverty in client countries. The Bank achieves this objective principally by raising financing in capital markets around the world and providing loans, guarantees and technical assistance for projects and programs in member countries. ABN Amro Bank NV was the arranger of this transaction, and was joined by a selling group of Colombian financial intermediaries including Corfinsura as lead manager and Alianza Valores, Ultrabursátiles and Suvalor as the selling agents for the bonds.