TIDM42BI
RNS Number : 5067V
Inter-American Development Bank
23 July 2018
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No.: 654
ZAR 40,000,000 Zero Coupon Notes due July 20, 2021 (the
"Notes")
Issue Price: 83.00 percent
No application has been made to list the Notes on any stock
exchange.
HSBC
The date of this Pricing Supplement is July 16, 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.: 654
2. Aggregate Principal Amount: ZAR 40,000,000
3. Issue Price: ZAR 33,200,000, which is 83.00 percent
of the Aggregate Principal Amount.
4. Issue Date: July 19, 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)): ZAR 100,000
7. Specified Currency
(Condition 1(d)): South African Rand ("ZAR") (the
lawful currency of the Republic
of South Africa)
8. Specified Principal Payment
Currency
(Conditions 1(d) and 7(h)): ZAR
9. Specified Interest Payment
Currency Not Applicable
(Conditions 1(d) and 7(h)):
10. Maturity Date
(Condition 6(a)): July 20, 2021
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: 6.401810151 percent per annum, annually
compounded
(b) Reference Price: Issue Price
(c) Fixed Rate Day Count
Fraction(s): 30/360, unadjusted
13. Relevant Financial Center: New York City, Tokyo, London and
Johannesburg
14. Relevant Business Day: New York City, Tokyo, London and
Johannesburg
15. Redemption Amount (Condition
6(a)): ZAR 100,000 per Authorized Denomination
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 an amount equal
to the Amortized Face Amount of
such Note (calculated in accordance
with Condition 6(c))
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 represents and 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) South Africa: The Dealer represents and agrees
that it has not offered and sold,
and will not offer or sell, directly
or indirectly, any Notes in the
Republic of South Africa or to any
person, corporate or other entity
resident in the Republic of South
Africa except in accordance with
exchange control regulations of
the Republic of South Africa and
in circumstances which would not
constitute an offer to the public
within the meaning of the South
African Companies Act, 1973 (as
amended).
(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")."
22. 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
Global Agent and Clearance Euroclear Bank SA/NV and/or Clearstream,
and Luxembourg
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: 183353721
(b) ISIN: XS1833537217
7. Identity of Dealer: HSBC Bank plc
8. Provisions for Bearer Notes:
(a) Exchange Date: Not earlier than August 28, 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
1. The language set out under the heading "Use of Proceeds" in
the Prospectus shall be deleted in its entirety and replaced by the
following:
"An amount equal to the net proceeds of the issue of the Notes
(which proceeds may be converted into other currencies) shall be
recorded by IADB in a separate sub-account supporting Eligible
Projects. These proceeds will be invested in accordance with the
IADB's conservative liquidity investment guidelines until used to
support the IADB's financing of Eligible Projects. So long as the
Notes are outstanding and the account has a positive balance, the
Bank shall direct an amount equal to such net proceeds to its
lending projects within the fields of Education, Youth, and
Employment, subject to and in accordance with the IADB's
policies.
Although Eligible Projects funded by the net proceeds shall be
reported on the IADB website on an annual basis, funds shall be
reduced from the account on a semi-annual basis by amounts matching
the disbursements made during such semi-annual period in respect of
Eligible Projects.
"Eligible Projects" means all projects funded, in whole or in
part, by IADB that promote early childhood care and education,
through formal primary and secondary education, or facilitate labor
market placement by improving the transition from school to work
through vocational training. Eligible Projects may include projects
in Latin America and the Caribbean that target (a) early childhood
development, effective teaching and learning among children and
youth ("Education Projects"), (b) early childhood care and
youth-at-risk programs ("Youth Projects") or (c) labor
intermediation systems, job opportunities and workforce skills
("Employment Projects").
Examples of Education Projects include, without limitation:
-- Early childhood development programs
-- Primary education programs, which includes teacher training, bilingual education, literacy, math and science education and school infrastructure
-- Secondary education programs, which includes programs
directed to improving retention and graduation, developing teaching
and learning methods and providing assistance to disadvantaged
children
-- Compensatory education programs
-- Teacher education and effectiveness programs
-- E-education programs
Examples of Youth Projects include, without limitation:
-- Support for parents and caregivers to improve quality of child care
-- Youth-At-Risk programs which support interventions, policy
design, and/or impact evaluations to benefit at-risk youth
Examples of Employment Projects include, without limitation:
-- School-to-Work transition programs
-- Vocational and technical education programs
-- Human resources and workforce development programs
-- Labor intermediation systems
-- Vocational and Workforce training programs, directed to
improving social and labor acclimation for youth, unemployed adults
and active workers
The above examples of Education Projects, Youth Projects and
Employment Projects are for illustrative purposes only and no
assurance can be provided that disbursements for projects with
these specific characteristics will be made by IADB during the term
of the Notes."
2. 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 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 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
IODUOOBRWAABUAR
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