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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