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TIDM42BI
RNS Number : 9355P
Inter-American Development Bank
31 May 2018
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No.: 647
IDR 55,400,000,000 5.23 percent Notes due June 14, 2023 (the "Notes")
payable in Japanese Yen
Issue Price: 100.00 percent
No application has been made to list the Notes on any stock exchange.
Tokai Tokyo Securities Europe Limited
The date of this Pricing Supplement is as of May 25, 2018.
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") set forth in the Prospectus dated January 8, 2001 (the "Prospectus") (which for the avoidance of doubt does not constitute a prospectus for the purposes of Part VI of the United Kingdom Financial Services and Markets Act 2000 or a base prospectus for the purposes of Directive 2003/71/EC of the European Parliament and of the Council). This Pricing Supplement must be read in conjunction with the Prospectus. This document is issued to give details of an issue by the Inter-American Development Bank (the "Bank") under its Global Debt Program and to provide information supplemental to the Prospectus. Complete information in respect of the Bank and this offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus.
Terms and Conditions
The following items under this heading "Terms and Conditions" (as supplemented by the attached "Annex to Pricing Supplement, IDB Series No. 647") are the particular terms which relate to the issue the subject of this Pricing Supplement. These are the only terms which form part of the form of Notes for such issue.
1. Series No.: 647 2. Aggregate Principal Amount: IDR 55,400,000,000 3. Issue Price: 100.00 percent of the Aggregate Principal Amount The Issue Price will be payable in Japanese Yen ("JPY"), being the lawful currency of Japan, in the amount of JPY 433,338,800 based on the agreed rate of JPY 0.007822 per one IDR. 4. Issue Date: May 31, 2018 5. Form of Notes Bearer only. The Notes will (Condition 1(a)): initially be represented by a temporary global note in bearer form (the "Temporary Bearer Global Note"). Interests in the Temporary Bearer Global Note will, not earlier than the Exchange Date, be exchangeable for interests in a permanent global note in bearer form (the "Permanent Bearer Global Note"). Interests in the Permanent Bearer Global Note will be exchangeable for definitive notes in bearer form ("Definitive Bearer Notes"), with all Coupons in respect of interest attached, in the following circumstances: (i) if the Permanent Bearer Global Note is held on behalf of a clearing system and such clearing system is closed for business for a continuous period of fourteen (14) days (other than by reason of holidays, statutory or otherwise) or announces its intention to permanently cease business or does in fact do so, by any such holder giving written notice to the Global Agent; and (ii) at the option of any such holder upon not less than sixty (60) days written notice to the Bank and the Global Agent from Euroclear and Clearstream, Luxembourg on behalf of such holder; provided that no such exchanges will be made by the Global Agent, and no Noteholder may require such an exchange, during a period of fifteen (15) days ending on the due date for any payment of principal on the Notes. 6. Authorized Denomination(s) IDR 50,000,000 (Condition 1(b)): 7. Specified Currency Indonesian Rupiah ("IDR") being (Condition 1(d)): the lawful currency of the Republic of Indonesia; provided that all payments in respect of the Notes will be made in JPY. 8. Specified Principal Payment JPY Currency (Conditions 1(d) and 7(h)): 9. Specified Interest Payment JPY Currency (Conditions 1(d) and 7(h)): 10. Maturity Date June 14, 2023 (Condition 6(a); Fixed The Maturity Date is subject Interest Rate): to adjustment in accordance with the Modified Following Business Day Convention with no adjustment to the amount of interest otherwise calculated. 11. Interest Basis Fixed Interest Rate (Condition (Condition 5): 5(I)) 12. Interest Commencement Date June 4, 2018 (Condition 5(III)): 13. Fixed Interest Rate (Condition 5(I)): (a) Interest Rate: 5.23 percent per annum (b) Fixed Rate Interest Semi-annually in arrears on Payment Date(s): June 14 and December 14 of each year, commencing on December
14, 2018 and ending on the Maturity Date. Each Fixed Rate Interest Payment Date is subject to adjustment in accordance with the Modified Following Business Day Convention with no adjustment to the amount of interest otherwise calculated. The Interest Amount with respect to the Interest Period from and including the Interest Commencement Date to but excluding December 14, 2018, shall be a JPY amount calculated on the relevant IDR Valuation Date as follows: IDR 1,380,139 multiplied by IDR Rate (rounding, if necessary, the entire resulting figure to the nearest whole JPY, with JPY 0.5 being rounded upwards) The Interest Amount with respect to each subsequent Interest Period shall be a JPY amount calculated on the relevant IDR Valuation Date as follows: IDR 1,307,500 multiplied by IDR Rate (rounding, if necessary, the entire resulting figure to the nearest whole JPY, with JPY 0.5 being rounded upwards) (c) Fixed Rate Day Count Fraction(s): 30/360 14. Relevant Financial Center: Tokyo 15. Relevant Business Day: Tokyo, London, New York City, Singapore and Jakarta 16. Redemption Amount (Condition An amount in JPY per Authorized 6(a)): Denomination, calculated as follows on the IDR Valuation Date for the Maturity Date: IDR 50,000,000 multiplied by IDR Rate (rounding, if necessary, the entire resulting figure to the nearest whole JPY, with JPY 0.5 being rounded upwards) 17. Issuer's Optional Redemption No (Condition 6(e)): 18. Redemption at the Option No of the Noteholders (Condition 6(f)): 19. Early Redemption Amount In the event of any Notes becoming (including accrued interest, due and payable prior to the if applicable) (Condition Maturity Date in accordance 9): with Condition 9, the Early Redemption Amount of each such Note shall be a JPY amount equal to the Redemption Amount that is determined in accordance with "16. Redemption Amount (Condition 6(a))" plus accrued and unpaid interest, if any, as determined in accordance with "13. Fixed Interest Rate (Condition 5(I))"; provided that, for the purpose of determining such JPY amount, the IDR Valuation Date shall mean the date that is five (5) Relevant Business Days prior to the date on which the Early Redemption Amount shall be due and payable as provided in Condition 9. 20. Governing Law: New York 21. Selling Restrictions: (a) United States: Under the provisions of Section 11(a) of the Inter-American Development Bank Act, the Notes 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. Notes in bearer form are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by U.S. tax regulations. (b) United Kingdom: The Dealer has agreed that it has complied and will comply with all applicable provisions of the Financial Services and Markets Act of 2000 with respect to anything done by it in relation
to the Notes in, from or otherwise involving the United Kingdom. (c) Republic of Indonesia: The Notes are not and will not be registered with the Financial Services Authority previously known as the Capital Market and Financial Institutions Supervisory Agency (the "OJK") in Indonesia. As such, the Notes (including the distribution and dissemination of the Pricing Supplement, other written materials either through advertisements or other media authorized) are not authorized by the OJK for their sale by public offering in the Indonesian territory and/or to Indonesian entities or residents in the Indonesian territory in circumstances which constitute a public offering of securities under the Indonesian Law No. 8/1995 regarding Capital Markets. Likewise, the Notes and the Pricing Supplement have not been reviewed, registered or authorized by the Central Bank (Bank Indonesia) for their distribution through banking institutions in Indonesia. As such, the Dealer has represented and agreed that (i) it has not offered or sold and will not offer or sell any Notes in the Republic of Indonesia or to Indonesian nationals, corporates or residents including by way of invitation, offering or advertisement, and (ii) has not distributed, and will not distribute, the Prospectus, this Pricing Supplement, or any other offering material relating to the Notes in the Republic of Indonesia, or to Indonesian nationals, corporates or residents, in a manner which constitutes a public offering of the Notes under the laws and regulations of the Republic of Indonesia. (d) Japan: The Dealer acknowledges that a secondary distribution (Uridashi) of the Notes is scheduled to be made in Japan and represents that it is purchasing the Notes as principal and has agreed that in connection with the initial offering of Notes, it has not offered or sold and will not directly or indirectly offer or sell any Notes in Japan or to, or for the benefit of, any resident of Japan (including any Japanese corporation or any other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (except in compliance with the Financial Instruments and Exchange Law of Japan (Law no. 25 of 1948, as amended) and all other applicable laws and regulations of Japan), and furthermore undertakes that any securities dealer to whom it sells any Notes will agree that it is purchasing the Notes as principal and that it will not offer or sell any Notes, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (except as aforesaid). (e) General No action has been or will be taken by the Bank that would permit a public offering of the Notes, or possession or distribution of any offering material relating to the Notes in any jurisdiction where action for that purpose is required. Accordingly, the Dealer agrees that it will observe all applicable
provisions of law in each jurisdiction in or from which it may offer or sell Notes or distribute any offering material. 22. Amendment to Condition 7(a)(i): Condition 7(a)(i) is hereby amended by deleting the first sentence thereof and replacing it with the following: "Payments of principal and interest in respect of Registered Notes shall be made to the person shown on the Register at the close of business on the business day before the due date for payment thereof (the "Record Date")." 23. Amendment to Condition 7(h): The following shall apply to Notes any payments in respect of which are payable in a Specified Currency other than United States Dollars: Condition 7(h) is hereby amended by deleting the words "the noon buying rate in U.S. dollars in the City of New York for cable transfers for such Specified Currency as published by the Federal Reserve Bank of New York on the second Business Day prior to such payment or, if such rate is not available on such second Business Day, on the basis of the rate most recently available prior to such second Business Day" and replacing them with the words "a U.S. dollar/Specified Currency exchange rate determined by the Calculation Agent as of the second Business Day prior to such payment, or, if the Calculation Agent determines that no such exchange rate is available as of such second Business Day, on the basis of the exchange rate most recently available prior to such second Business Day. In making such determinations, the Calculation Agent shall act in good faith and in a commercially reasonable manner having taken into account all available information that it shall deem relevant". If applicable and so appointed, and unless otherwise defined herein, the "Calculation Agent" referred to in amended Condition 7(h) shall be the Global Agent under the Bank's Global Debt Program - namely, Citibank, N.A., London Branch, or its duly authorized successor. Other Relevant Terms 1. Listing: None 2. Details of Clearance System Euroclear Bank S.A./N.V. and/or Approved by the Bank and Clearstream, Luxembourg the Global Agent and Clearance and Settlement Procedures: 3. Syndicated: No 4. Commissions and Concessions: No commissions or concessions are payable in respect of the Notes. The Dealer or one of its affiliates has arranged a swap with the Bank in connection with this transaction and will receive amounts thereunder that may comprise compensation. 5. Estimated Total Expenses None. The Dealer has agreed to pay for all material expenses related to the issuance of the Notes. 6. Codes: (a) Common Code: 181210273 (b) ISIN: XS1812102736 7. Identity of Dealer: Tokai Tokyo Securities Europe Limited 8. Identity of Calculation Citibank, N.A., New York Branch Agent: All determinations of the Calculation Agent shall (in the absence of manifest error) be final and binding on all parties (including, but not limited to, the Bank and the Noteholders) and shall be made in its sole discretion
in good faith and in commercially reasonable manner in accordance with the calculation agent agreement between the Bank and the Calculation Agent. 9. Provisions for Bearer Notes: (a) Exchange Date: Not earlier than 40 (forty) days after the Issue Date. (b) Permanent Global Note: Yes (c) Definitive Bearer Notes: No, except in the circumstances described under "Form of Notes" herein and in the Prospectus. (d) Individual Definitive No Registered Notes: (e) Registered Global Notes: No 10. Additional Risk Factors: As set forth in the Additional Investment Considerations.
General Information
IDB Statement on Venezuela
On May 14, Venezuela passed the Bank's 180-day limit for payment arrears for an amount of $88.3 million, placing the country in a non-accrual status.
Venezuela's total loan arrears, including those that have not yet reached the 180-day limit, stand at $212.4 million on a total debt of $2.011 billion. Venezuela's debt to the IDB represents 1.6% of the Bank's total assets as of March 31, 2018.
Under the IDB's guidelines on arrears, the Bank cannot undertake any lending activities concerning Venezuela until its arrears are cleared. As a matter of policy, the Bank does not reschedule its sovereign-guaranteed loans.
The IDB does not expect Venezuela's non-accrual event to affect the Bank's 2018 liquidity and capital ratios, which remain strong and in full compliance with its financial policies. The IDB anticipates that the event will not affect its 2018 lending program.
Venezuela, which became a shareholder of the IDB when the institution was founded in 1959, has reiterated its commitment to the IDB and its intention to undertake regular payments. The IDB acknowledges Venezuela's efforts and will continue to work with its government to resolve the arrears.
Additional Information Regarding the Notes
1. Additional Investment Considerations:
There are significant risks associated with the Notes, including but not limited to exchange rate risk, price risk and liquidity risk. Investors should consult their own financial, legal, accounting and tax advisors about the risks associated with an investment in these Notes, the appropriate tools to analyze that investment, and the suitability of the investment in each investor's particular circumstances.
The methodologies for determining the Japanese Yen- Indonesian Rupiah foreign exchange rate may result in a Redemption Amount of the Notes, or an interest payment on the Notes, being significantly less than anticipated.
The Bank may hedge its obligations under the Notes by entering into a swap transaction with the Dealer or one of its affiliates as swap counterparty. Assuming no change in market conditions or any other relevant factors, the price, if any, at which the Dealer or another purchaser might be willing to purchase Notes in a secondary market transaction is expected to be lower, and could be substantially lower, than the original issue price of the Notes. This is due to a number of factors, including that (i) the potential profit to the secondary market purchaser of the Notes may be incorporated into any offered price and (ii) the cost of funding used to value the Notes in the secondary market is expected to be higher than our actual cost of funding incurred in connection with the issuance of the Notes. In addition, the original issue price of the Notes included, and secondary market prices are likely to exclude, the projected profit that our swap counterparty or its affiliates may realize in connection with this swap. Further, as a result of dealer discounts, mark-ups or other transaction costs, any of which may be significant, the original issue price may differ from values determined by pricing models used by our swap counterparty or other potential purchasers of the Notes in secondary market transactions.
The Notes offered by this Pricing Supplement are complex financial instruments and may not be suitable for certain investors. Investors intending to purchase the Notes should consult with their tax and financial advisors to ensure that the intended purchase meets the investment objective before making such purchase.
INTER-AMERICAN DEVELOPMENT BANK
By:
Name: F. Ramon Ruiz Garcia
Title: Division Chief, Treasury - Treasurer
Annex to Pricing Supplement, IDB Series No. 647
Other Applicable Definitions
"IDR Business Day" means a day on which commercial banks and foreign exchange markets settle payments in Tokyo, New York City, London, Singapore and Jakarta.
"IDR Rate" means, in respect of an IDR Valuation Date, the IDR/JPY exchange rate, expressed as the amount of JPY per one IDR, which is calculated by the Calculation Agent in accordance with the following formula and rounded to the nearest six decimal places with 0.0000005 being rounded up:
USD/JPY Reference Rate divided by USD/IDR Reference Rate
"IDR Valuation Date" for a Fixed Rate Interest Payment Date or the Maturity Date means the date that is five (5) Relevant Business Days prior to such Fixed Rate Interest Payment Date or the Maturity Date, as applicable.
"Jakarta Business Day" means a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets are open for business and settle payments in Jakarta.
"Reference Dealers" means major banks active in the USD/IDR or USD/JPY currency and foreign exchange markets, as applicable.
"USD" means United States dollars.
"USD/IDR Reference Rate" means the spot rate of USD/IDR expressed as the number of IDR per one USD, for settlement in two Jakarta Business Days, published on the Thomson Reuters Screen "JISDOR" page (or such other page or service as may replace any such page for the purposes of displaying the USD/IDR foreign exchange rate) at approximately 10:00 a.m. Jakarta time on the applicable IDR Valuation Date, as determined by the Calculation Agent.
In the event that no such quotation appears on the Thomson Reuters Screen "JISDOR" page (or its successor page for the purpose of displaying such rate), the USD/IDR Reference Rate shall be determined by the Calculation Agent by requesting quotations for mid rate of USD/IDR foreign exchange rate at or about 11:00 a.m. Singapore time on the first (1st) IDR Business Day following the relevant IDR Valuation Date from the Reference Dealers.
If five or four quotations are provided as requested, the USD/IDR Reference Rate will be the arithmetic mean (rounded to the nearest whole IDR, 0.5 being rounded upwards) of the remaining three or two such quotations, as the case may be, for such rate provided by the Reference Dealers, after disregarding the highest such quotation and the lowest such quotation (provided that, if two or more such quotations are the highest such quotations, then only one of such quotations shall be disregarded, and if two or more such quotations are the lowest quotations, then only one of such lowest quotations will be disregarded).
If only three or two such quotations are provided as requested, the USD/IDR Reference Rate shall be determined as described above except that the highest and lowest quotations will not be disregarded.
If none or only one of the Reference Dealers provides such quotation, the USD/IDR Reference Rate will be determined by the Calculation Agent in its sole discretion, acting in good faith and in a commercially reasonable manner, having taken into account relevant market practice, by reference to such additional sources as it deems appropriate.
"USD/JPY Reference Rate" means the bid rate of USD/JPY, expressed as the number of JPY per one USD, published on the Thomson Reuters Screen "JPNU" page (or its successor page for the purpose of displaying such rate) as of 12:00 p.m., Tokyo time on the applicable IDR Valuation Date, as determined by the Calculation Agent.
In the event that no such quotation appears on the Thomson Reuters Screen "JPNU" page (or its successor page for the purpose of displaying such rate), the USD/JPY Reference Rate shall be determined by the Calculation Agent by requesting quotations for bid rate of USD/JPY foreign exchange rate at or about 12:00 p.m. Tokyo time on the first (1st) IDR Business Day following the relevant IDR Valuation Date from the Reference Dealers.
If five or four quotations are provided as requested, the USD/JPY Reference Rate will be the arithmetic mean of the remaining three or two such quotations, as the case may be, for such rate provided by the Reference Dealers, after disregarding the highest such quotation and the lowest such quotation (provided that, if two or more such quotations are the highest such quotations, then only one of such quotations shall be disregarded, and if two or more such quotations are the lowest quotations, then only one of such lowest quotations will be disregarded).
If only three or two such quotations are provided as requested, the USD/JPY Reference Rate shall be determined as described above except that the highest and lowest quotations will not be disregarded.
If none or only one of the Reference Dealers provides such quotation, the USD/JPY Reference Rate will be determined by the Calculation Agent in its sole discretion, acting in good faith and in a commercially reasonable manner, having taken into account relevant market practice, by reference to such additional sources as it deems appropriate.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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June 01, 2018 02:00 ET (06:00 GMT)
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