TIDM42BI
RNS Number : 5812X
Inter-American Development Bank
31 August 2015
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No: 522
BRL 6,500,000 8.60 percent Fixed Rate Notes due 28 August 2018
(the "Notes")
Payable in Japanese Yen
Issue Price: 100 percent
No application has been made to list the Notes on any stock
exchange.
HSBC
The date of this Pricing Supplement is 25 August 2015
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.: 522
2. Aggregate Principal Amount: BRL 6,500,000
3. Issue Price: BRL 6,500,000, which is 100 percent
of the Aggregate Principal Amount
The Issue Price will be payable
in JPY in the amount of JPY 253,540,576.
4. Issue Date: 27 August 2015
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 Japanese Yen ("JPY")
8. Specified Principal Payment
Currency
(Conditions 1(d) and 7(h)): JPY
9. Specified Interest Payment
Currency JPY
(Conditions 1(d) and 7(h)):
10. Maturity Date
(Condition 6(a); Fixed 28 August 2018
Interest Rate):
11. Interest Basis
(Condition 5): Fixed Interest Rate (Condition
5(I))
12. Interest Commencement Date
(Condition 5(III)): 28 August 2015
13. Fixed Interest Rate (Condition
5(I)):
(a) Interest Rate: 8.60 percent per annum
(b) Fixed Rate Interest
Payment Date(s): Semi-annually on 28 February and
28 August in each year, commencing
on 28 February 2016 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.
Calculation of Interest Amount
As soon as practicable and in accordance
with the procedures specified herein,
the Calculation Agent (as defined
below) will determine the Reference
Rate (as defined below) and calculate
the amount of interest payable
(the "Interest Amount") with respect
to each Authorized Denomination
for the relevant Interest Period.
The Interest Amount with respect
each Interest Period shall be a
JPY amount calculated on the relevant
FX Fixing Date (as defined below)
as follows:
BRL 430.00 multiplied by the Reference
Rate
(rounding, if necessary, the entire
resulting figure to the nearest
whole JPY, with JPY 0.5 being rounded
upwards).
For the avoidance of doubt, in
any case where Fixed Rate Day Count
Fraction(s) shall apply, Interest
Amount shall be calculated as follows:
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(i) Authorized Denomination multiplied
by Interest Rate;
(ii) The figure (i) above multiplied
by the figure calculated pursuant
to the Fixed Rate Day Count Fraction(s)
(rounding, if necessary, to the
nearest two decimal places with
0.005 being rounded upwards);
(iii) The figure (ii) above multiplied
by the Reference Rate (rounding,
if necessary, the entire resulting
figure to the nearest whole JPY,
with JPY 0.5 being rounded upwards).
Where:
"BRL09" means the BRL/USD offered
rate (expressed as the number of
BRL per one United States dollars
("USD")) for settlement in two
São Paulo and New York Business
Days, as reported by the Banco
Central do Brasil (www.bcb.gov.br;
see "Cotações e boletins",
herein referred to as, the "Banco
Central do Brasil's Website") by
approximately 1:15 p.m. São
Paulo time or any succeeding rate
source on the relevant FX Fixing
Date and as published on Bloomberg
Page <BZFXPTAX Index>, or such
other page or services that may
replace any such page for the purpose
of displaying the reference BRL/USD
foreign exchange rate provided
that the rate on the Banco Central
do Brasil'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. In the event that for
any reason BRL09 is unavailable
on the relevant FX Fixing Date,
the BRL09 will be assumed to equal
to the BRL12 for that day.
"BRL12" means the USD/BRL specified
foreign exchange rate for USD (expressed
as the number of BRL per one USD)
for settlement in two São
Paulo and New York Business Days
as published on EMTA's website
(www.emta.org) at approximately
3:45 p.m. São Paulo time or
as soon thereafter as practicable
or such replacement service on
the relevant FX Fixing Date. BRL12
is the "BRL Methodology Survey
Rate" that is calculated by EMTA
(or a service provider EMTA may
select in its sole discretion)
pursuant to the EMTA BRL Industry
Survey Methodology (which means
a methodology, dated as of March
1, 2004, as amended from time to
time, for a centralized industry-wide
survey of financial institutions
in Brazil that are active participants
in the BRL/USD spot rate markets
for the purpose of determining
BRL12).
"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.
"FX Fixing Date" means the date
that is five (5) Business Days
prior to each Fixed Rate Interest
Payment Date, the Maturity Date
or any other date on which payment
under the Notes is due and payable,
provided, however, that there shall
be no adjustment to such FX Fixing
Date (i) pursuant to any Business
Day Convention or (ii) if there
is an Unscheduled Holiday between
the FX Fixing Date and such date
of payment.
"Price Materiality Event" means,
with respect to an FX Fixing Date,
an event where BRL12 differs from
BRL09 by more than three (3) percent
of BRL12.
"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.
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"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 Brasil'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 Brasil'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
Brasil's Website.
"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 or Price Materiality Event
occurs, then the Calculation Agent
shall determine the Reference Rate
as a cross currency exchange rate
by dividing the USD/JPY FX Rate
by BRL12 (such rate being rounded
to the nearest two decimal places
with 0.005 being rounded upwards),
provided that if BRL12 and/or the
USD/JPY FX Rate is/are unavailable,
including the case in which the
FX Fixing Date falls on an Unscheduled
Holiday, then the Calculation Agent
will 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.
"São Paulo and New York Business
Day" means a day (other than a
Saturday or a Sunday) on which
commercial banks and foreign exchange
markets settle payments in São
Paulo and New York.
"São Paulo Business Day" means
a day (other than a Saturday or
a Sunday) on which commercial banks
and foreign exchange markets settle
payments in São Paulo.
"Unscheduled Holiday" means a day
that is not a São Paulo Business
Day and the market was not aware
of such fact (by means of a public
announcement or by reference to
other publicly available information)
until a time later than 9:00 a.m.
local time on the day which is
two São Paulo Business Days
prior to the relevant FX Fixing
Date.
"USD/JPY FX Rate" means the USD/JPY
bid exchange rate (expressed as
the number of JPY per one USD)
as published on the Reuters Screen
Page "JPNW", or its successor page
for the purpose of displaying such
rate, as of 4:00 p.m. New York
time on the relevant FX Fixing
Date.
(c) Fixed Rate Day Count
Fraction(s): 30/360
14. Relevant Financial Center: Brazil, London, New York, and Tokyo
15. Relevant Business Days: Brazil, London, New York and Tokyo
16. 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).
17. Issuer's Optional Redemption
(Condition 6(e)): No
18. Redemption at the Option
of the Noteholders (Condition No
6(f)):
19. Early Redemption Amount
(including accrued interest, In the event the Notes become due
if applicable) (Condition and payable as provided in Condition
9): 9 (Default), the Early Redemption
Amount with respect to each Authorized
Denomination will 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 purposes of such determination,
the "FX Fixing Date" shall be the
date fixed by the Calculation Agent.
20. Governing Law: New York
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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 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.
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 Banking, 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: 126772238
(b) ISIN: XS1267722384
7. Identity of Dealer: HSBC Bank plc
8. Provisions for Bearer Notes:
(a) Exchange Date: Not earlier than 6 October 2015,
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 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. Holders
of the Notes should also consult
with their professional tax
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advisors regarding tax laws
applicable to them and, in particular,
with respect to tax laws relating
to debt securities in bearer
form.
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.
General Information
Additional Information regarding the Notes
1.The EU has adopted Council Directive 2003/48/EC on the
taxation of savings income (the "Savings Directive"). The Savings
Directive requires EU Member States to provide to the tax
authorities of other EU Member States details of payments of
interest and other similar income paid by a person established
within its jurisdiction to (or secured by such a person for the
benefit of) an individual resident, or to (or secured for) certain
other types of entity established, in that other EU Member State,
except that Austria will instead impose a withholding system for a
transitional period (subject to a procedure whereby, on meeting
certain conditions, the beneficial owner of the interest or other
income may request that no tax be withheld) unless during such
period it elects otherwise.
A number of non-EU countries and territories, including
Switzerland, have adopted similar measures.
The Bank undertakes that it will ensure that it maintains a
paying agent in a country which is an EU Member State that will not
be obliged to withhold or deduct tax pursuant to the Savings
Directive.
The Council of the European Union has adopted a Directive (the
"Amending Savings Directive") which would, when implemented, amend
and broaden the scope of the requirements of the Savings Directive
described above, including by expanding the range of payments
covered by the Savings Directive, in particular to include
additional types of income payable on securities, and by expanding
the circumstances in which payments must be reported or paid
subject to withholding. The Amending Savings Directive requires EU
Member States to adopt national legislation necessary to comply
with it by 1 January 2016, which legislation must apply from 1
January 2017.
The Council of the European Union has also adopted a Directive
(the "Amending Cooperation Directive") amending Council Directive
2011/16/EU on administrative cooperation in the field of taxation
so as to introduce an extended automatic exchange of information
regime in accordance with the Global Standard released by the OECD
Council in July 2014. The Amending Cooperation Directive requires
EU Member States to adopt national legislation necessary to comply
with it by 31 December 2015, which legislation must apply from 1
January 2016 (1 January 2017 in the case of Austria). The Amending
Cooperation Directive is generally broader in scope than the
Savings Directive, although it does not impose withholding taxes,
and provides that to the extent there is overlap of scope, the
Amending Cooperation Directive prevails. The European Commission
has therefore published a proposal for a Council Directive
repealing the Savings Directive from 1 January 2016 (1 January 2017
in the case of Austria) (in each case subject to transitional
arrangements). The proposal also provides that, if it is adopted,
EU Member States will not be required to implement the Amending
Savings Directive. Information reporting and exchange will however
still be required under Council Directive 2011/16/EU (as
amended).
2. United States Federal Income Tax Matters
The following supplements the discussion under the "Tax Matters"
section of the Prospectus regarding the U.S. federal income tax
treatment of the Notes, and is subject to the limitations and
exceptions set forth therein. Any tax disclosure in the Prospectus
or this pricing supplement is of a general nature only, is not
exhaustive of all possible tax considerations and is not intended
to be, and should not be construed to be, legal, business or tax
advice to any particular prospective investor. Each prospective
investor should consult its own tax advisor as to the particular
tax consequences to it of the acquisition, ownership, and
disposition of the Notes, including the effects of applicable U.S.
federal, state, and local tax laws and non-U.S. tax laws and
possible changes in tax laws.
Due to a change in law since the date of the Prospectus, the
second paragraph of "-Payments of Interest" under the United States
Holders section should be read as follows: "Interest paid by the
Bank on the Notes constitutes income from sources outside the
United States and will, depending on the circumstances, be
"passive" or "general" income for purposes of computing the foreign
tax credit."
Information with Respect to Foreign Financial Assets. Owners of
"specified foreign financial assets" with an aggregate value in
excess of U.S.$50,000 (and in some circumstances, a higher
threshold) may be required to file an information report with
respect to such assets with their tax returns. "Specified foreign
financial assets" may include financial accounts maintained by
foreign financial institutions (which may include the Notes), as
well as the following, but only if they are not held in accounts
maintained by financial institutions: (i) stocks and securities
issued by non-United States persons, (ii) financial instruments and
contracts held for investment that have non-United States issuers
or counterparties, and (iii) interests in foreign entities. Holders
are urged to consult their tax advisors regarding the application
of this reporting obligation to their ownership of the Notes.
Medicare Tax. A United States holder that is an individual or
estate, or a trust that does not fall into a special class of
trusts that is exempt from such tax, will be subject to a 3.8% tax
(the "Medicare tax") on the lesser of (1) the United States
holder's "net investment income" for the relevant taxable year and
(2) the excess of the United States holder's modified adjusted
gross income for the taxable year over a certain threshold (which
in the case of individuals will be between U.S.$125,000 and
U.S.$250,000, depending on the individual's circumstances). A
holder's net investment income will generally include its gross
interest income and its net gains from the disposition of Notes,
unless such interest payments or net gains are derived in the
ordinary course of the conduct of a trade or business (other than a
trade or business that consists of certain passive or trading
activities). If you are a United States holder that is an
individual, estate or trust, you are urged to consult your tax
advisors regarding the applicability of the Medicare tax to your
income and
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