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
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July 18, 2018 13:20 ET (17:20 GMT)
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