TIDM42BI
RNS Number : 5083V
Inter-American Development Bank
23 July 2018
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No: 661
INR 1,402,800,000 6.00 percent Notes due July 23, 2021 (the
"Notes")
Payable in Japanese Yen
Issue Price: 99.980 percent
No application has been made to list the Notes on any stock
exchange.
Nomura International plc
The date of this Pricing Supplement is July 12, 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.
MiFID II product governance / Retail investors, professional
investors and ECPs target market - See "General
Information-Additional Information regarding the Notes-Matters
relating to MiFID II" below.
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.: 661
2. Aggregate Principal Amount: INR 1,402,800,000
3. Issue Price: INR 1,402,519,440, which is 99.980
percent of the Aggregate Principal
Amount
The Issue Price will be payable
in JPY in the amount of JPY 2,290,314,246
at the agreed rate of JPY 1.633
per one INR.
4. Issue Date: July 23, 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)): INR 100,000
7. Specified Currency
(Condition 1(d)): Indian Rupee ("INR") 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 July 23, 2021
Interest Rate): The Maturity Date is subject to
adjustment in accordance with the
Following Business Day Convention
with no adjustment to the amount
of interest otherwise calculated.
11. Interest Basis
(Condition 5): Fixed Interest Rate (Condition
5(I))
12. Interest Commencement Date
(Condition 5(III)): Issue Date (July 23, 2018)
13. Fixed Interest Rate (Condition
5(I)):
(a) Interest Rate: 6.00 percent per annum
(b) Fixed Rate Interest Semi-annually on January 23 and
Payment Date(s): July 23 in each year, commencing
on January 23, 2019 and ending on
the Maturity Date.
Each Fixed Rate Interest Payment
Date is subject to adjustment in
accordance with the 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
to each Interest Period shall be
a JPY amount calculated on the relevant
Rate Fixing Date (as defined below)
as follows:
INR 3,000.00 multiplied by the Reference
Rate
(rounding down, if necessary, the
entire resulting figure to the nearest
lower whole JPY).
If Price Source Disruption Event
occurs, then the Reference Rate
shall be determined in the following
order.
(a) The Reference Rate shall be
calculated by the Calculation Agent
by dividing the USD/JPY_fx by the
USD/INR_fx; provided that such number
(expressed as the number of JPY
per one INR) shall be rounded to
two decimal places with 0.005 being
rounded upwards.
(b) If the USD/JPY_fx is not available
on the relevant Rate Fixing Date,
the Calculation Agent will request
five leading reference banks (selected
by the Calculation Agent at its
sole discretion) in the Tokyo interbank
market for their mid market quotations
of the USD/JPY spot exchange rate
at approximately 3:30 p.m. Tokyo
time on such date. The highest and
the lowest of such quotations will
be disregarded and the arithmetic
mean of the remaining three quotations
will be the USD/JPY_fx, provided
that, if two or more such quotations
are the highest quotations, then
only one of such highest quotations
shall be disregarded, and if two
or more such quotations are the
lowest quotations then only one
of such lowest quotations shall
be disregarded; provided that:
i. if only four quotations are so
provided, then the USD/JPY_fx shall
be the arithmetic mean of such quotations
without regard to the highest and
lowest values quoted, provided that,
if two or more such quotations are
the highest quotations, then only
one of such highest quotations shall
be disregarded, and if two or more
such quotations are the lowest quotations
then only one of such lowest quotations
shall be disregarded;
ii. if fewer than four quotations
but at least two quotations can
be obtained, then the USD/JPY_fx
shall be the arithmetic mean of
the quotations actually obtained
by the Calculation Agent;
iii. if only one quotation is available,
in that event, the Calculation Agent
may determine that such quotation
shall be the USD/JPY_fx; and
iv. if no such quotation is available
or if the Calculation Agent determines
in its sole discretion that no suitable
reference bank who is prepared to
quote is available, the USD/JPY_fx
shall be determined by the Calculation
Agent in good faith and in a commercially
reasonable manner.
(c) If the USD/INR_fx is not available
on the relevant Rate Fixing Date,
the Calculation Agent will request
five leading reference banks (selected
by the Calculation Agent at its
sole discretion) which regularly
deal in the USD/INR exchange market
for their market quotations of the
USD/INR spot exchange rate on such
date. The highest and the lowest
of such quotations will be disregarded
and the arithmetic mean of the remaining
three quotations will be the USD/INR_fx,
provided that, if two or more such
quotations are the highest quotations,
then only one of such highest quotations
shall be disregarded, and if two
or more such quotations are the
lowest quotations then only one
of such lowest quotations shall
be disregarded; provided that:
i. if only four quotations are so
provided, then the USD/INR_fx shall
be the arithmetic mean of such quotations
without regard to the highest and
lowest values quoted, provided that,
if two or more such quotations are
the highest quotations, then only
one of such highest quotations shall
be disregarded, and if two or more
such quotations are the lowest quotations
then only one of such lowest quotations
shall be disregarded;
ii. if fewer than four quotations
but at least two quotations can
be obtained, then the USD/INR_fx
shall be the arithmetic mean of
the quotations actually obtained
by the Calculation Agent;
iii. if only one quotation is available,
in that event, the Calculation Agent
may determine that such quotation
shall be the USD/INR_fx; and
iv. if no such quotation is available
or if the Calculation Agent determines
in its sole discretion that no suitable
reference bank who is prepared to
quote is available, the USD/INR_fx
shall be determined by the Calculation
Agent in good faith and in a commercially
reasonable manner.
(d) Provided further that, if any
Rate Fixing Date falls on an Unscheduled
Holiday, the USD/INR_fx will be
determined by the Calculation Agent
on such Rate Fixing Date in its
sole discretion, acting in good
faith and in a commercially reasonable
manner.
Where:
"Business Day" means a day (other
than a Saturday or a Sunday) on
which commercial banks and foreign
exchange markets settle payments
in London, Mumbai, New York and
Tokyo.
"Calculation Agent" means JP Morgan
Chase Bank, N.A., New York. 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.
"Mumbai Business Day" means a day
(other than a Saturday or a Sunday)
on which commercial banks and foreign
exchange markets settle payments
and are open for general business
(including dealing in foreign exchange
and foreign currency deposits) in
Mumbai.
"Price Source Disruption Event"
means the event that the RBIC Rate
is not available for any reason
on the Reuters Screen "RBIC" Page
or any successor page on the relevant
Rate Fixing Date.
"Rate Fixing Date" means the date
that is 10 Business Days prior to
the relevant Fixed Rate Interest
Payment Date (including the Maturity
Date), which shall not be subject
to adjustment by any Business Day
Convention. Provided that, even
if there is an Unscheduled Holiday
between the relevant Rate Fixing
Date and relevant date of payment,
such Rate Fixing Date shall not
be subject to adjustment.
"RBIC Rate" means the spot JPY/INR
foreign exchange rate, (expressed
as the number of INR per 100 JPY)
as reported by the Reserve Bank
of India and as published on Reuters
Screen "RBIC" Page (or such other
page or services as may replace
that page for the purpose of obtaining
the reference JPY/INR exchange rate).
"Reference Rate" means the product
of 100 and the reciprocal number
of the RBIC Rate on each Rate Fixing
Date. The resulting figure (expressed
as the number of JPY per one INR)
shall be rounded to four decimal
places with 0.00005 being rounded
upwards.
"Unscheduled Holiday" means a day
that is not a Mumbai Business Day
and this fact was not publically
known to market participants (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 in Mumbai,
two Mumbai Business Days prior to
the relevant Rate Fixing Date.
"USD/INR_fx" means the spot USD/INR
foreign exchange rate, (expressed
as the number of INR per one USD),
for settlement in two Mumbai Business
Days reported by the Reserve Bank
of India which appears on Reuters
Screen "RBIB" Page (or any such
other page or services as may replace
that page for the purpose of obtaining
the spot rate for the USD/INR exchange
rate).
"USD/JPY_fx" means the USD/JPY exchange
rate (expressed as the number of
JPY per one USD) as of 3:30 p.m.
Tokyo time on the relevant Rate
Fixing Date, which appears under
the "MID" column on Bloomberg Screen
"BFIX (USD/JPY Fixings) " Page (or
such other page as or services may
replace that page for the purpose
of obtaining the mid rate for the
USD/JPY exchange rate).
(c) Fixed Rate Day Count
Fraction(s): 30/360
14. Relevant Financial Center: London, Mumbai, New York and Tokyo
15. Relevant Business Days: London, Mumbai, 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
Rate Fixing Date with respect to
the Maturity Date as follows:
INR 100,000 multiplied by the Reference
Rate
(rounding down, if necessary, the
entire resulting figure to the nearest
lower whole JPY).
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,
if applicable) (Condition In the event the Notes become due
9): and payable as provided in Condition
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 "Rate
Fixing Date" shall be the date fixed
by the Calculation Agent.
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 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) India:
The Dealer has acknowledged that,
it will not offer or sell any Notes
in India at any time. The Notes
have not been approved by the Securities
and Exchange Board of India, Reserve
Bank of India or any other regulatory
authority of India, nor have the
foregoing authorities approved this
Pricing Supplement or confirmed
the accuracy or determined the adequacy
of the information contained in
this Pricing Supplement. This Pricing
Supplement has not been and will
not be registered as a prospectus
or a statement in lieu of prospectus
with the Registrar of Companies
in India.
(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.
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
Approved by the Bank and
the Euroclear Bank SA/NV and/or Clearstream
Global Agent and Clearance Banking, Luxembourg
and
Settlement Procedures:
3. Syndicated: No
4. Commissions and Concessions: 1.80 percent of the Aggregate Principal
Amount
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: 184781131
(b) ISIN: XS1847811319
7. Identity of Dealer: Nomura International plc
8. Provisions for Bearer Notes:
(a) Exchange Date: Not earlier than September 4, 2018,
which is the date that is 43 (forty
three) 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
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. Matters relating to MiFID II
The Bank does not fall under the scope of application of the
MiFID II regime. Consequently, the Bank does not qualify as an
"investment firm", "manufacturer" or "distributor" for the purposes
of MiFID II.
MiFID II product governance / Retail investors, professional
investors and ECPs target market - Solely for the purposes of the
manufacturer's product approval process, the target market
assessment in respect of the Notes has led to the conclusion that:
(i) the target market for the Notes is eligible counterparties,
professional clients and retail clients, each as defined in MiFID
II; and (ii) all channels for distribution of the Notes are
appropriate. Any person subsequently offering, selling or
recommending the Notes (a "distributor") should take into
consideration the manufacturer's target market assessment; however,
a distributor subject to MiFID II is responsible for undertaking
its own target market assessment in respect of the Notes (by either
adopting or refining the manufacturer's target market assessment)
and determining appropriate distribution channels.
For the purposes of this provision, the expression MiFID II
means Directive 2014/65/EU, as amended.
2. 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-Indian Rupee
foreign exchange rate may result in a Redemption Amount or the
Early Redemption Amount (if applicable) 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, one of its affiliates or
other parties 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
IODUORWRWWABUAR
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