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Name | Symbol | Market | Type |
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Inter 2042 | LSE:42BI | London | Medium Term Loan |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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TIDM42BI
RNS Number : 0903V
Inter-American Development Bank
18 July 2018
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No: 652
BRL 11,000,000 Zero Coupon Notes due July 13, 2021 (the "Notes")
Payable in Japanese Yen
Issue Price: 83.90 percent
No application has been made to list the Notes on any stock exchange.
HSBC
The date of this Pricing Supplement is July 9, 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" 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.: 652 2. Aggregate Principal Amount: BRL 11,000,000 3. Issue Price: BRL 9,229,000, which is 83.90 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 276,708,493 based on the agreed rate of JPY 29.9825 per one BRL. 4. Issue Date: July 12, 2018 5. Form of Notes (Condition 1(a)): Bearer only. The Notes will 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"), 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) (Condition 1(b)): BRL 10,000 7. Specified Currency (Condition 1(d)): Brazilian Real ("BRL") (the lawful currency of the Federative Republic of Brazil); provided that all payments in respect of the Notes will be made in JPY. 8. Specified Principal Payment Currency (Conditions 1(d) and 7(h)): JPY 9. Specified Interest Payment Currency Not Applicable (Conditions 1(d) and 7(h)): 10. Maturity Date (Condition 6(a); Fixed July 13, 2021 Interest Rate): The Maturity Date is subject to adjustment in accordance with the Modified Following Business Day Convention with no adjustment to the amount of interest otherwise calculated. 11. Interest Basis (Condition 5): Zero Coupon (Condition 5(IV)) 12. Zero Coupon (Conditions 5(IV) and 6(c)): (a) Amortization Yield: 6.02033477 percent per annum, annually compounded (b) Reference Price: Issue Price (c) Fixed Rate Day Count Fraction(s) if not 30/360 basis: 30/360, unadjusted 13. Relevant Financial Center: Brazil, London, New York City and Tokyo 14. Relevant Business Days: Brazil, London, New York City and Tokyo 15. Redemption Amount (Condition 6(a)): The Redemption Amount with respect to each Authorized Denomination will be a JPY amount calculated by the Calculation Agent on the FX Fixing Date with respect to the Maturity Date as follows: BRL 10,000 multiplied by the Reference Rate (and rounding, if necessary, the entire resulting figure to the nearest whole JPY, with JPY 0.5 being rounded upwards). Where: "Reference Rate" means, with respect to an FX Fixing Date, the reciprocal number (expressed as the number of JPY per one BRL) of the ask side of the
PTAX Rate (such reciprocal number being rounded to the nearest two decimal places with 0.005 being rounded upwards), on such FX Fixing Date. If any Price Source Disruption Event occurs, then the Calculation Agent shall determine the Reference Rate in its sole discretion, acting in good faith and in a commercially reasonable manner, having taken into account relevant market practice. "PTAX Rate" means, with respect to an FX Fixing Date, the BRL/JPY foreign exchange rate (expressed as the number of BRL per one JPY) as reported by the Banco Central do Brasil (see the Banco Central do Brazil's Website) by approximately 1:15 p.m. São Paulo time or any succeeding rate source, and as published on Bloomberg Page <BZFXJPY Index> or such other page or services that may replace any such page for the purpose of displaying the reference BRL/JPY foreign exchange rate provided that the rate on the Banco Central do Brazil's Website will be used for all calculations, if there is any inconsistency between the rate on Bloomberg Page and the rate on the Banco Central do Brazil's Website. "Price Source Disruption Event" means an event where it is impossible to obtain a Reference Rate by reference to the PTAX Rate on the relevant FX Fixing Date. "FX Fixing Date" means the date that is five (5) Business Days prior to the Maturity Date or any other date on which payment under the Notes is due and payable. "Business Day" means a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in London, New York City, Brazil and Tokyo. "Brazil" means a city or cities in any of Rio de Janeiro, Brasilia or São Paulo "Calculation Agent" means HSBC Bank plc. 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 a commercially reasonable manner in accordance with a calculation agent agreement between the Bank and the Calculation Agent. 16. Issuer's Optional Redemption (Condition 6(e)): No 17. Redemption at the Option of the Noteholders (Condition No 6(f)): 18. Early Redemption Amount (including accrued interest, if applicable) (Condition In the event of any Notes becoming 9): due and payable prior to the Maturity Date in accordance with Condition 9 (but, for the avoidance of doubt, not Condition 6(e)), the Early Redemption Amount shall be a JPY amount equal to the Amortized Face Amount of such Note (calculated in accordance with Condition 6(c)); provided that, for the purpose of determining such JPY amount, FX Fixing 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 (and rounding, if necessary, the entire resulting figure to the nearest whole JPY, with JPY 0.5 being rounded upwards). 19. Governing Law: New York 20. 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 circumstances permitted by U.S. tax regulations. (b) United Kingdom: The Dealer agrees that it has complied and will comply with all applicable provisions of the Financial Services and Markets
Act 2000 with respect to anything done by it in relation to such Notes in, from or otherwise involving the United Kingdom. (c) Federative Republic of Brazil: The Dealer has represented and agreed that it has not offered or sold and will not offer or sell any Notes in Brazil. The Notes have not been and will not be registered with the Brazilian Securities and Exchange Commission (Commissão de Valores Mobililiarios, the "CVM"). (d) Japan: The Dealer 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. 21. 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")." 21. 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 Approved by the Bank and the Euroclear Bank SA/NV and/or Global Agent and Clearance Clearstream, Luxembourg and Settlement Procedures: 3. Syndicated: No 4. Commissions and Concessions: No commissions or concessions are payable in respect of the Notes. The Dealer 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: 183093282 (b) ISIN: XS1830932825 7. Identity of Dealer: HSBC Bank plc 8. Provisions for Bearer Notes: (a) Exchange Date: Not earlier than August 21, 2018, which is the date that is 40 (forty) days after the Issue Date. (b) Permanent Global Note: Yes (c) Definitive Bearer Notes: No, except in the limited circumstances described under "Form of Notes" herein and in the Prospectus (d) Individual Definitive Registered Notes: No (e) Registered Global Notes: No 9. 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
. Additional Investment Considerations:
There are various risks associated with the Notes including, but not limited to, exchange rate risk, price risk and liquidity risk. Investors should consult with their own financial, legal, and accounting 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-Brazilian Real 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: Gustavo Alberto De Rosa Title: Chief Financial Officer and General Manager, Finance Department
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
IODUWABRWBABAAR
(END) Dow Jones Newswires
July 18, 2018 13:20 ET (17:20 GMT)
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