Source - RNS
RNS Number : 2801M
Inter-American Development Bank
11 October 2016
 

 

 

 

PRICING SUPPLEMENT

Inter-American Development Bank

Global Debt Program

Series No: 574

IDR 55,000,000,000 5.57 percent Notes due October 7, 2020 (the "Notes") 

payable in Japanese Yen 

Issue Price: 100.00 percent

 

 

 

No application has been made to list the Notes on any stock exchange.

 

 

J.P. Morgan Securities plc

 

The date of this Pricing Supplement is as of October 3, 2016



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. 574" (the "Annex")) 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.:

574

 

2.

Aggregate Principal Amount:

IDR 55,000,000,000

 

3.

Issue Price:

IDR 55,000,000,000, which is 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 427,900,000 at the agreed rate of JPY 0.007780 per one IDR.

 

4.

Issue Date:

October 6, 2016

 

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"), 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)
(Condition 1(b)):

IDR 10,000,000

 

7.

Specified Currency
(Condition 1(d)):

Indonesian Rupiah ("IDR") being 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 Currency
(Conditions 1(d) and 7(h)):

JPY

 

9.

Specified Interest Payment Currency
(Conditions 1(d) and 7(h)):

JPY

 

10.

Maturity Date
(Condition 6(a); Fixed Interest Rate):

October 7, 2020; provided, that, if the IDR Valuation Date (as defined in the Annex) for the Maturity Date is postponed as set forth in the definition of "IDR Valuation Date," then the Maturity Date shall be postponed to the date which is five (5) Relevant Business Days following such IDR Valuation Date, with no adjustment to the amount of interest otherwise calculated.

The Maturity Date (as may be postponed pursuant to the proviso in the previous paragraph) is subject to adjustment (or further 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):

Fixed Interest Rate (Condition 5(I))

 

12.

Interest Commencement Date
(Condition 5(III)):

October 7, 2016

 

13.

Fixed Interest Rate (Condition 5(I)):

(a)  Interest Rate:

 

5.57 per cent. per annum

 


(b)  Fixed Rate Interest Payment Date(s):

Semi-annually in arrears on April 7 and October 7 of each year, commencing on April 7, 2017 and ending on the Maturity Date; provided, that, if the IDR Valuation Date (as defined in the Annex) for a Fixed Rate Interest Payment Date is postponed as set forth in the definition of "IDR Valuation Date," then such Fixed Rate Interest Payment Date shall be postponed to the date which is five (5) Relevant Business Days following such IDR Valuation Date, with no adjustment to the amount of interest otherwise calculated.

Each Fixed Rate Interest Payment Date (as may be postponed pursuant to the proviso in the previous paragraph) is subject to adjustment (or further adjustment) in accordance with the Modified Following Business Day Convention with no adjustment to the amount of interest otherwise calculated. 

An amount in JPY is payable per Authorized Denomination on each Fixed Rate Interest Payment Date, calculated as follows on the IDR Valuation Date (as defined in the Annex) for such Fixed Rate Interest Payment Date:

IDR 278,500 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 Days:

Tokyo, London, New York City and Jakarta

 

16.

Redemption Amount (Condition 6(a)):

 

 

An amount in JPY per Authorized Denomination, calculated as follows on the IDR Valuation Date (as defined in the Annex) for the Maturity Date:

IDR 10,000,000 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 (Condition 6(e)):

No

 

18.

Redemption at the Option of the Noteholders (Condition 6(f)):

No

 

19.

 

 

Early Redemption Amount (including accrued interest, if applicable) (Condition 9):

 

In the event of any Notes becoming due and payable prior to the Maturity Date in accordance 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 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
Global Agent and Clearance and
Settlement Procedures:

Euroclear Bank S.A./N.V. and/or Clearstream, Luxembourg

3.

Syndicated:

No

4.

Commissions and Concessions:

No commissions or concessions are payable in respect of the Notes. An affiliate of 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:

147885636


(b)  ISIN:

XS1478856369

7.

Identity of Dealer:

J.P. Morgan Securities plc

8.

Identity of Calculation Agent:

JPMorgan Chase Bank, N.A.

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 November 15, 2016, 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 circumstances described under "Form of Notes" herein and in the Prospectus.

 

(d)        Individual Definitive Registered Notes:

No

 

(e)        Registered Global notes:

No

10.

Additional Risk Factors:

As set forth in the Additional Investment Considerations.

 

General Information

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:  Gustavo Alberto De Rosa

Title:     Chief Financial Officer

            and General Manager, Finance Department

                          

            

 



Annex to Pricing Supplement, IDB Series No. 574

Other Applicable Definitions

"IDR Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in Tokyo, New York City 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 five decimal places with 0.000005 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 (a "Scheduled IDR Valuation Date"); provided, that, if a Scheduled IDR Valuation Date is an Unscheduled Holiday, then the relevant IDR Valuation Date shall be the immediately following Relevant Business Day; provided further, that, if an IDR Valuation Date has not occurred on or before the tenth (10th) consecutive day after a Scheduled IDR Valuation Date, then the next day after such tenth (10th) day that would have been a Relevant Business Day but for the Unscheduled Holiday shall be deemed to be the IDR Valuation Date relating to such Scheduled IDR Valuation Date.

"Reference Dealers" means five banks active in the USD/IDR or USD/JPY currency and foreign exchange market, as applicable, as selected by the Calculation Agent in its sole discretion, acting in good faith and in a commercially reasonable manner.

"Settlement Business Day" means a day on which commercial banks are open for business (including dealings in a foreign exchange in accordance with the market practice of the foreign exchange market) in Jakarta.

"Unscheduled Holiday" means a day that is not a Relevant 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 in the principal financial centre(s) of IDR on the date which is five (5) Relevant Business Days prior to the Scheduled IDR Valuation Date.

"USD" means United States dollars.

"USD/IDR Reference Rate" means the spot rate determined by the Calculation Agent that is equal to the USD/IDR spot rate expressed as the amount of IDR per one USD, for settlement in two Settlement 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.

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 mid rate of USD/JPY, expressed as the amount 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 mid 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 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.


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