AVVISO n.13762 11 Luglio 2016 MOT
AVVISO n.13762 | 11 Luglio 2016 | MOT |
Mittente del comunicato : BORSA ITALIANA
Societa' oggetto dell'Avviso
: BIRS
Testo del comunicato
Oggetto : AMMISSIONE ALLE NEGOZIAZIONI ED AVVIO DELLA FASE DI CONCLUSIONE DEI CONTRATTI CONDIZIONATI ALL'EMISSIONE TITOLI WORLD BANK
Si veda allegato.
Disposizioni della Borsa
Oggetto: AMMISSIONE ALLE NEGOZIAZIONI ED AVVIO DELLA FASE DI CONCLUSIONE DEI CONTRATTI CONDIZIONATI ALL’EMISSIONE DEL TITOLO
Titolo: “Obbligazioni Banca Mondiale Tasso Fisso 5.80% con Scadenza 22 Luglio 2021 in Rupie Indiane Pagabili in Euro”
Borsa Italiana S.p.A., ai sensi dell’articolo 2.4.3 del Regolamento dei Mercati, ha stabilito la procedura di quotazione del Titolo in oggetto. Con provvedimento n. 8232 dell’11/07/2016 Borsa Italiana ha disposto, su domanda della International Bank for Reconstruction and Development, l’ammissione alle negoziazioni del Titolo in oggetto e l’avvio della fase di conclusione dei contratti condizionati all’emissione con decorrenza dal giorno 12 luglio 2016 e fino al 14 luglio 2016 (inclusi), salvo chiusura anticipata ovvero proroga.
Successivamente alla data di chiusura del Periodo di distribuzione, Borsa Italiana stabilirà con Avviso la data di avvio delle negoziazioni ufficiali sul MOT del Titolo che, salvo ove diversamente richiesto dall'Emittente, coinciderà con la Data di godimento del Titolo.
CARATTERISTICHE DEL TITOLO
Emittente International Bank for Reconstruction and Development
Valore nominale max 1.500.000.000 INR
Data di godimento 22 luglio 2016
Data di scadenza 22 luglio 2021
Rimborso rimborso alla pari a scadenza.
Interessi annui lordi le obbligazioni frutteranno interessi annui lordi, pari al 5,80% del valore nominale del prestito, pagabili il 22 luglio di ciascun anno fino a scadenza.
DESCRIZIONE DELLA FASE DI CONCLUSIONE DEI CONTRATTI CONDIZIONATI ALL’EMISSIONE DEL TITOLO
Prezzo fisso dei contratti condizionati
(Prezzo di Emissione) 100
Valuta di regolamento dei
contratti condizionati EUR
Il tasso di cambio verrà determinato il giorno lavorativo successivo alla chiusura dell’Offerta sulla base del cross fra il fixing USD/INR, rilevato dalla Reserved Bank of India intorno alle ore 1.30 p.m. di Mumbai e pubblicato sulla pagina Reuters RBIB, e il fixing EUR/USD rilevato da Bloomberg intorno alle ore 1.00 p.m. (Londra) e pubblicato alla pagina Bloomberg BFIX.
Periodo di distribuzione dal 12 luglio 2016 al 14 luglio 2016 (inclusi), salvo chiusura
anticipata ovvero proroga
Data di regolamento
dei contratti condizionati conclusi
nel Periodo di distribuzione 22 luglio 2016
Operatore aderente al mercato
incaricato alla distribuzione BNP Paribas S.A. (codice operatore IT2000)
Proposte di negoziazione inseribili
dagli altri operatori esclusivamente ordini in acquisto senza limite di prezzo (market order) o con limite di prezzo (limit order) che deve essere pari al Prezzo di Emissione. Gli ordini devono essere immessi con parametri Fill-or-Kill (FOK), Immediate or Cancel (IOC) o DAY.
Solo gli ordini con limite di prezzo e con modalità di esecuzione DAY permarranno sul book anche in caso di temporanea assenza dell’operatore incaricato alla distribuzione; viceversa gli ordini senza limite di prezzo e gli ordini con limite di prezzo con parametri FOK o IOC, in caso di temporanea assenza dell’operatore incaricato alla distribuzione, risulteranno cancellati.
Modalità di distribuzione unica fase di mercato a negoziazione continua dalle 9.00 alle
17.30 (non è prevista la fase di asta di apertura)
Tagli 150.000 INR
Importo minimo di contrattazione 150.000 INR
CODICI ISIN XS1442212145
Xxxxxxxxxx XX 000000
Denominazione WORLD BANK TF 5,8% LG21 INR Mercato e comparto
di negoziazione Borsa - Mercato telematico delle obbligazioni (MOT) - segmento EuroMOT – “classe euro-obbligazioni, ABS, titoli di emittenti esteri e altri titoli di debito”. I contratti condizionati conclusi nel Periodo di distribuzione non sono garantiti da Cassa di Compensazione e Garanzia.
EMS 3.000.000
DISPOSIZIONI DELLA BORSA ITALIANA
Borsa Italiana dispone l’ammissione alle negoziazioni dell’“Obbligazioni Banca Mondiale Tasso Fisso 5.80% con Scadenza 22 Luglio 2021 in Rupie Indiane Pagabili in Euro” (ISIN XS1442212145) e l’avvio della fase di conclusione dei contratti condizionati all’emissione del Titolo in oggetto sul comparto obbligazionario (MOT) dal giorno 12 luglio 2016 e fino al 14 luglio 2016 (inclusi), salvo chiusura anticipata ovvero proroga.
Allegato Final Terms relativi all’offerta pubblica di sottoscrizione e alla contestuale ammissione a quotazione sul MOT del prestito
Warning: the final Aggregate Nominal Amount will be known once the Offer Period is closed. The results of the offer of the Notes and the final Aggregate Nominal Amount will be published as soon as possible after the closing of the Offer Period on the following website: xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx. For the avoidance of doubt, all the other terms and conditions are and will remain as disclosed in the below Final Terms.
FINAL TERMS dated July 12, 2016
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
(the “Issuer”)
Issue of up to INR 1,500,000,000 5.80 per cent. Fixed Rate Notes Payable in EUR due July 22, 2021 (the “Notes”) or
“Obbligazioni Banca Mondiale Tasso Fisso 5.80% con Scadenza 22 Luglio 2021 in Rupie Indiane Pagabili in Euro”
under the Issuer’s Global Debt Issuance Facility
The Prospectus dated May 28, 2008 referred to below (as completed by these Final Terms) has been prepared on the basis that, except as provided in sub-paragraph (ii) below, any person making or intending to make an offer of the Notes may only do so in:
(i) circumstances in which no obligation arises for the Issuer or the Dealer to publish a prospectus or to distribute the Prospectus or any amendment or supplement thereto issued in connection with the offering of any of the Notes or any other offering material, or in any jurisdiction where there are no requirements for such purpose to be complied with; or
(ii) the Public Offer Jurisdiction mentioned in the Terms and Conditions of the Public Offer set out below, provided such person is one of the persons mentioned in the Terms and Conditions of the Public Offer set out below (the “Authorised Offerors”) and that such offer is made during the Offer Period specified for such purposes therein.
Neither the Issuer nor the Dealer has authorised, nor do they authorise, the making of any offer of Notes in any other circumstances.
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 Issuer’s Global Debt Issuance Facility Prospectus dated May 28, 2008 (the “Prospectus”).
THIS DOCUMENT CONSTITUTES THE FINAL TERMS OF THE NOTES DESCRIBED HEREIN AND MUST BE READ IN CONJUNCTION WITH SUCH PROSPECTUS.
NONE OF THE PUBLIC OFFER IN ITALY, THE PROSPECTUS AND THIS DOCUMENT OR ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE PUBLIC OFFER IN ITALY HAVE BEEN OR WILL BE SUBMITTED TO THE CLEARANCE PROCEDURES OF THE COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA (“CONSOB”) PURSUANT TO APPLICABLE ITALIAN LAWS AND REGULATIONS. THE PUBLIC OFFER IS BEING CARRIED OUT IN THE REPUBLIC OF ITALY AS AN EXEMPTED OFFER PURSUANT TO ARTICLE 100, PARAGRAPH 1(D) OF ITALIAN LEGISLATIVE DECREE NO. 58 OF 24 FEBRUARY 1998 AS AMENDED; THEREFORE THE PROSPECTUS DOES NOT CONSTITUTE A PROSPECTUS WITHIN THE MEANING OF DIRECTIVE 2003/71/EC AS AMENDED AND IMPLEMENTED IN ITALY.
POTENTIAL INVESTORS SHOULD MAKE THEIR OWN ASSESSMENT OF THE INVESTMENT AND MAY INVEST IN THE NOTES DURING THE OFFER PERIOD THROUGH AUTHORISED PERSONS AND IN COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS OR WITH REQUIREMENTS IMPOSED BY CONSOB, OR ANY OTHER ITALIAN AUTHORITY. EACH AUTHORISED OFFEROR MUST COMPLY WITH THE APPLICABLE LAWS AND REGULATIONS CONCERNING INFORMATION DUTIES VIS-À-VIS ITS CLIENTS IN CONNECTION WITH THE NOTES AND THE PUBLIC OFFER IN ITALY.
ONLY THE ENGLISH VERSION OF THE FINAL TERMS AND PROSPECTUS IS BINDING AND ANY ITALIAN TRANSLATION THEREOF IS NON-BINDING. IN CASE OF ANY CONTRADICTION BETWEEN THE TWO VERSIONS, THE ENGLISH VERSION WILL PREVAIL.
SUMMARY OF THE NOTES
1. Issuer: International Bank for Reconstruction and Development (“IBRD”)
2. (i) Series Number: 11465
(ii) Tranche Number: 1
3. Specified Currency or Currencies (Condition 1(d)):
4. Aggregate Nominal Amount:
Indian Rupee (“INR”) provided that all payments in respect of the Notes shall be made in Euro (“EUR”)
(i) Series: Up to INR 1,500,000,000, subject to increase as set forth under “Terms and Conditions of the Public Offer―(vi) Details of the minimum and/or maximum amount of application (whether in number of Notes or aggregate amount to invest)” below
(ii) Tranche: Up to INR 1,500,000,000, subject to increase as set forth under “Terms and Conditions of the Public Offer―(vi) Details of the minimum and/or maximum amount of application (whether in number of Notes or aggregate amount to invest)” below
5. (i) Issue Price: 100 per cent. of the Specified Denomination for each Note
(ii) Net Proceeds: Means the Aggregate Nominal Amount, payable in EUR
and determined by the Calculation Agent on the Initial Rate Fixing Date by applying the following formula:
Aggregate Nominal Amount in INR divided by Initial Reference Rate
Where:
“Initial Rate Fixing Date” means the Business Day immediately following the last day of the Offer Period.
“Initial Reference Rate” means, in respect of the Initial Rate Fixing Date, the cross currency EUR/INR exchange
6. (i) Specified Denominations
(Condition 1(b)):
(ii) Calculation Amount (Condition 5(j)):
rate expressed as the amount of INR per one EUR, calculated by multiplying the USD/INR Rate with the EUR/USD Rate, rounded to the nearest five decimal places (with 0.000005 being rounded down). In the event of a Disruption Event or Unscheduled Holiday (both as defined below) on such date, the Initial Reference Rate shall 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.
INR 150,000
INR 150,000
7. Issue Date: July 22, 2016
8. Maturity Date (Condition 6(a)): July 22, 2021
9. Interest Basis (Condition 5): 5.80 per cent. Fixed Rate
(further particulars specified below)
10. Redemption/Payment Basis (Condition 6):
FX Linked Redemption, payable in EUR, as set out in Term 17 below
11. Change of Interest or Redemption/Payment Basis:
Not Applicable
12. Call/Put Options (Condition 6): Not Applicable
13. Status of the Notes (Condition 3): Unsecured and unsubordinated
14. Listing: Application has been made for the Notes to be listed on the Italian Stock Exchange and admitted for a distribution phase and subsequent trading on the Mercato Telematico delle Obbligazioni (MOT), EuroMOT segment, organised and managed by Borsa Italiana S.p.A. The Notes have already been admitted to listing before the commencement of the distribution phase on the MOT
– and the final amount of Notes that are issued on the Issue Date will be admitted to trading on the MOT on the date specified by means of a notice of Borsa Italiana S.p.A
15. Method of distribution: Non-syndicated
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
16. Fixed Rate Note Provisions (Condition 5(a)):
Applicable
(i) Rate of Interest: 5.80 per cent. per annum payable annually in arrear
(ii) Interest Payment Date(s): July 22, 2017, July 22, 2018, July 22, 2019, July 22,
2020 and the Maturity Date, not subject to adjustment in
accordance with a Business Day Convention, provided that if the corresponding Scheduled Rate Fixing Date is postponed due to an Unscheduled Holiday or a Disruption Event, the Interest Payment Date shall be five Business Days after the date on which the Reference Rate is determined, and no additional interest or other amount will be paid as a result of any such adjustment or postponement (further particulars specified in Term 16
(vii) below).
(iii) Interest Period Dates: Each July 22, 2017, July 22, 2018, July 22, 2019, July
22, 2020 and July 22, 2021, not subject to adjustment in accordance with a Business Day Convention.
(iv) Business Day Convention: Not Applicable
(v) Fixed Coupon Amount: INR 8,700 per Calculation Amount, payable in EUR and
determined by the Calculation Agent on the relevant Rate Fixing Date by applying the following formula:
INR 8,700 divided by Reference Rate (as defined in Term 16 (vii) below)
(vi) Day Count Fraction (Condition 5(l)):
30/360
(vii) Other terms relating to the method of calculating interest for Fixed Rate Notes:
“Rate Fixing Date” means the date that is ten Business Days prior to each Interest Period Date, the Maturity Date or the date upon which the Notes become due and payable as provided in Condition 9 (the “Scheduled Rate Fixing Date”); provided, however, that if such date is an Unscheduled Holiday, the Rate Fixing Date shall be postponed to the next following Business Day. In the event the Scheduled Rate Fixing Date is so postponed due to an Unscheduled Holiday and if the Rate Fixing Date has not occurred on or before the 5th consecutive calendar day after the Scheduled Rate Fixing Date (any such period being a "Deferral Period"), then the day immediately succeeding the end of the Deferral Period that is a Business Day or that would have been a Business Day but for an Unscheduled Holiday shall be deemed to be the Rate Fixing Date.
“Reference Rate” means, in respect of a Rate Fixing Date, the cross currency EUR/INR exchange rate expressed as the amount of INR per one EUR, calculated by multiplying the USD/INR Rate with the EUR/USD Rate, rounded to the nearest five decimal places (with 0.000005 being rounded down). In the event of a Disruption Event (as defined below under “Fallback Provisions”) on any Rate Fixing Date, the Reference Rate shall be determined by the Calculation Agent by applying the Disruption Fallbacks in the order listed below under “Fallback Provisions”, until the Reference Rate can be determined.
“EUR/USD Rate”, means, in respect of a Rate Fixing
Date or the Initial Rate Fixing Date, as applicable, the EUR/USD exchange rate, expressed as the amount of USD per one EUR by reference to the closing mid spot rate displayed on Bloomberg Page “BFIX” at approximately 1:00 p.m. London time on such Rate Fixing Date or Initial Rate Fixing Date, as applicable. If, for the relevant Rate Fixing Date or the Initial Rate Fixing Date, as applicable, no such rate is displayed on such Bloomberg Page, the rate shall be determined on such Rate Fixing Date or the Initial Rate Fixing Date, as applicable, 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.
“USD/INR Rate”, means in respect of a Rate Fixing Date or the Initial Rate Fixing Date, as applicable, the USD/INR spot exchange rate for such date equal to the USD/INR official reference rate, expressed as the amount of INR per one USD, for settlement in two Mumbai Business Days, reported by the Reserve Bank of India, which appears on the Reuters Page “RBIB” (or such other page or service as may replace any such page for the purposes of displaying the USD/INR official reference rate) at approximately 1.30 p.m., Mumbai time, on that Rate Fixing Date (subject to the Fallback Provisions specified below) or Initial Rate Fixing Date, as applicable.
“Unscheduled Holiday” means a day that is not a Mumbai 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 Mumbai, two Mumbai Business Days prior to the relevant Rate Fixing Date or the Initial Rate Fixing Date, as applicable.
FALLBACK PROVISIONS (USD/INR Rate)
Disruption Fallbacks: In the event of a Disruption Event on a Rate Fixing Date, the USD/INR Rate shall be determined by the Calculation Agent by applying the following Disruption Fallbacks in the order listed below, until the Reference Rate can be determined:
1. Valuation Postponement | |
2. Fallback Reference Price | SFEMC INR Indicative Survey Rate (INR02) |
3. Fallback Survey Valuation Postponement | |
4. Calculation Agent Determination of USD/INR Rate |
“Cumulative Events”: Except as provided below under
Fallback Survey Valuation Postponement, in no event shall the total number of consecutive calendar days during which either (i) Rate Fixing Date is postponed due to an Unscheduled Holiday, or (ii) a Valuation Postponement shall occur (or any combination of (i) and (ii)), exceed 5 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 5 calendar day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period that otherwise would have been a Business Day, then such day shall be deemed to be a Rate Fixing Date, and (y) if, upon the lapse of any such 5 calendar day period, a Disruption Event shall have occurred or be continuing on the day following such period on which the Reference Rate otherwise would be determined, then Valuation Postponement shall not apply and the USD/INR Rate shall be determined in accordance with the next Disruption Fallback.
Where:
“Disruption Event” means that it becomes impossible to obtain the Reference Rate on a Rate Fixing Date or the Initial Reference Rate on the Initial Rate Fixing Date due to the impossibility to obtain the USD/INR Rate.
“Valuation Postponement” means, for purposes of obtaining the Reference Rate, that the USD/INR Rate will be determined on the Business Day first succeeding the day on which the Disruption Event ceases to exist, unless the Disruption Event continues to exist (measured from the date that, but for the occurrence of the Disruption Event, would have been the Rate Fixing Date) for a consecutive number of calendar days equal to the Maximum Days of Postponement. In such event, the USD/INR Rate will be determined on the next Business Day after the Maximum Days of Postponement (which will, subject to the provisions relating to Fallback Survey Valuation Postponement, be deemed to be the applicable Rate Fixing Date) in accordance with the next applicable Disruption Fallback.
“Fallback Reference Price” means that if Valuation Postponement fails to produce the Reference Rate, then the USD/INR Rate for the Rate Fixing Date will be determined by the Calculation Agent by reference to the SFEMC INR Indicative Survey Rate (INR02).
“Maximum Days of Postponement” means 5 calendar days.
“SFEMC INR Indicative Survey Rate (INR02)” means that the INR Rate for a given Rate Fixing Date will be the USD/INR specified rate for USD, expressed as the amount of INR per one USD, for settlement in two Business Days, as published on the web site of the Singapore Foreign Exchange Market Committee, EMTA Inc. (“SFEMC”) at approximately 3.30 p.m. (Singapore
time), or as soon thereafter as practicable on that Rate Fixing Date. Such rate will be calculated by SFEMC (or a service provider SFEMC may select in its sole discretion) pursuant to the SFEMC INR Indicative Survey Methodology (which means a methodology, dated as of December 1, 2004, as amended from time to time, for a centralised industry-wide survey of financial institutions that are active participants in the INR/USD markets for the purpose of determining the SFEMC INR Indicative Survey Rate).
“Fallback Survey Valuation Postponement” means that, in the event that the Fallback Reference Price is not available on or before the third Business Day (or day that would have been a Business Day but for an Unscheduled Holiday) succeeding the end of either (i) Valuation Postponement for a Disruption Event, (ii) Deferral Period for Unscheduled Holiday, or (iii) Cumulative Events, then the Reference Rate will be determined in accordance with the next applicable Disruption Fallback on such day. For the avoidance of doubt, Cumulative Events, if applicable, does not preclude postponement of valuation in accordance with this provision.
“Calculation Agent Determination of USD/INR Rate” means that, if Fallback Survey Valuation Postponement fails to produce the USD/INR Rate, then the Calculation Agent will determine the USD/INR Rate for the Rate Fixing Date in its sole discretion, acting in good faith and in a commercially reasonable manner having taken into account relevant market practice.
“Business Day” means a day (other than a Saturday or Sunday) (i) on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in each of London, New York and Mumbai and (ii) a day that is also a TARGET Settlement Day.
“Mumbai Business Day” means a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in Mumbai.
“Calculation Agent” means Citibank N.A., London Branch.
“Bloomberg Page” means, when used in connection with any designated page, the display page so designated on the Bloomberg service, or (i) any successor display page, other published source, information vendor or provider that has been officially designated by the sponsor of the original page or source; or (ii) if the sponsor has not officially designated a successor display page, an-other published source, service or provider (as the case may be), the successor display page, other
published source, service or provider, if any, designated by the relevant information vendor or provider (if different from the sponsor).
“Reuters Page” means, when used in connection with any designated page, the display page so designated on the Reuters service, or (i) any successor display page, other published source, information vendor or provider that has been officially designated by the sponsor of the original page or source; or (ii) if the sponsor has not officially designated a successor display page, an-other published source, service or provider (as the case may be), the successor display page, other published source, service or provider, if any, designated by the relevant information vendor or provider (if different from the sponsor).
“TARGET Settlement Day” means any day (other than a Saturday or Sunday) on which the Trans-European Automated Real-time Gross Settlement Express Transfer (“TARGET”) payment system is open for the settlement of payment in EUR.
“USD” means United States Dollars.
PROVISIONS RELATING TO REDEMPTION AND SETTLEMENT
17. Final Redemption Amount of each Note (Condition 6):
18. Early Redemption Amount (Condition 6(c)):
The Final Redemption Amount per Calculation Amount shall be payable in EUR and determined by the Calculation Agent on the Rate Fixing Date immediately preceding the Maturity Date, by applying the following formula:
Calculation Amount divided by Reference Rate (as defined in Term 16 (vii) above)
The Final Redemption Amount per Calculation Amount as determined in accordance with Term 17 above plus accrued and unpaid interest, if any, as determined in accordance with Term 16 above, except that the Reference Rate shall be determined on the tenth Business Day prior to the day upon which the Early Redemption Amount shall be due and payable (the “Early Redemption Rate Fixing Date”) and all references to ‘Rate Fixing Date’ shall be deemed to be replaced by ‘Early Redemption Rate Fixing Date’.
GENERAL PROVISIONS APPLICABLE TO THE NOTES
19. Form of Notes (Condition 1(a)): Registered Notes:
Global Registered Certificate available on Issue Date
20. New Global Note: No
21. Financial Centre(s) or other special provisions relating to payment dates (Condition 7(h)):
Mumbai, London and New York and a TARGET Settlement Day
22. Governing law (Condition 14): English
23. Additional Risk Factors: AN INVESTMENT IN THE NOTES IS SUBJECT TO
RISKS, INCLUDING BUT NOT LIMITED TO THE RISKS DESCRIBED BELOW, AS WELL AS THE RISKS DESCRIBED UNDER “RISK FACTORS” IN THE ACCOMPANYING PROSPECTUS. INVESTORS SHOULD CAREFULLY CONSIDER WHETHER THE NOTES ARE SUITED TO THEIR PARTICULAR CIRCUMSTANCES. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSULT THEIR FINANCIAL AND LEGAL ADVISERS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN THE NOTES AND THE SUITABILITY OF THE NOTES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
Suitability and appropriateness of Investment
An investment in the Notes is only suitable and appropriate for investors who have the requisite knowledge and experience in financial and business matters to evaluate the information contained in the Prospectus and the Final Terms, who have made their own independent decision to invest in the Notes and as to whether the Notes are suitable and appropriate for them, and who are capable of bearing the economic risk of an investment in the Notes.
Risk on the exchange rates
Because the Notes are denominated in INR and payable in EUR (determined by dividing the relevant amount in INR by the product of the USD/INR Rate and the EUR/USD Rate), the Noteholders will be exposed to currency exchange rate risks with respect to INR, USD and EUR. Changes in exchange rates relating to any of the currencies involved may result in a decrease in the effective yield of the Notes and, in certain circumstances, could result in a loss of all or a substantial portion of the principal of the Notes (including the Final Redemption Amount). Furthermore, since the Noteholders will receive payments on the Notes only on the Interest Payment Dates (including the Maturity Date), the Noteholders will not benefit from favourable changes in exchange rates at any other time during the term of the Notes. Because of the currency exchange rates, the market price of the Notes may be volatile.
Exchange rate movements for a particular currency are volatile and are the result of numerous factors. There is no guarantee that INR will not depreciate.
Events may operate to postpone Interest Payment Dates or Maturity Date
In the event that a Scheduled Rate Fixing Date is postponed as set forth in the Final Terms, a related Interest Payment Date (including the Maturity Date) of the Notes will be postponed by one Business Day for each Business Day that such Scheduled Rate Fixing Date is postponed, and therefore may be postponed by a number of Business Days up to the number of Business Days occurring during the period of 5 calendar days after the relevant Scheduled Rate Fixing Date. No interest or other payment will be payable because of any such postponement of the Interest Payment Date or the Maturity Date.
The market price of the Notes may be influenced by many factors
The Notes are not designed to be short-term trading instruments. Many factors, most of which are beyond IBRD’s control, will influence the value of the Notes and the price at which the Dealer may be willing to purchase or sell the Notes in the secondary market, including: interest and yield rates in the market, currency exchange rates, economic, financial, political and regulatory or judicial events that affect the stock markets generally and which may affect the time remaining to the maturity of the Notes and IBRD’s creditworthiness. Some or all of these factors may influence the price that Noteholders will receive if they choose to sell their Notes prior to maturity. The impact of any of the factors set forth above may enhance or offset some or all of any change resulting from another factor or factors.
24. Other final terms: The first sentence of Condition 7(a)(ii) is hereby replaced by the following: “Interest (which for the purpose of this Condition 7(a) shall include all Instalment Amounts other than final Instalment Amounts) on Registered Notes shall be paid to the person shown on the Register at the close of business on the calendar day before the due date for payment thereof (the “Record Date”).”
The Annex hereto is to be read in conjunction with and forms part of the Prospectus and these Final Terms.
DISTRIBUTION
25. (i) If syndicated, names of
Managers and underwriting commitments:
(ii) Stabilizing Manager(s) (if any):
Not Applicable
Not Applicable
26. If non-syndicated, name of Dealer: BNP Paribas
27. Total commission and concession: The Issuer will not pay any commission for the offering of the Notes.
For more information on the commissions, see “Offer Price” under “Terms and Conditions of the Public Offer” set forth below.
28. Additional selling restrictions: With respect to offering of the Notes, the first sentence of
“Sales Restrictions” appearing under Plan of Distribution on page 55 of the Prospectus shall be deleted and replaced with the following sentence:
“Save in respect of the Public Offer Jurisdiction, no action has been or will be taken in any jurisdiction by the Issuer or the Dealer that would permit a public offering of any of the Notes, or that would give rise to an obligation for the Issuer or the Dealer to publish a prospectus or to distribute the Prospectus or any amendment or supplement thereto issued in connection with the offering of any of the Notes or any other offering material.”
OPERATIONAL INFORMATION
29. ISIN Code: XS1442212145
30. Common Code: 144221214
31. Delivery: Delivery against payment
32. Registrar and Transfer Agent: Citibank, N.A., London Branch
33. Intended to be held in a manner No which would allow Eurosystem eligibility:
GENERAL INFORMATION
The following documents of IBRD are incorporated by reference in these Final Terms: (i) Global Debt Issuance Facility Prospectus dated May 28, 2008 (the “Prospectus”); (ii) IBRD’s most recent Information Statement dated September 17, 2015, and (iii) IBRD’s Quarterly Financial Statements (unaudited) dated March 31, 2016. These documents have been filed with the U.S. Securities and Exchange Commission (“SEC”) and are available on the SEC’s website as well as on the following website of IBRD: xxxx://xxxxxxxx.xxxxxxxxx.xxx/xxx/xxx/xxxxx.xxxx. Alternatively, to obtain copies of these documents, contact one of the Authorized Offerors (as defined below) or your financial advisor.
During the Offer Period the Notes will be offered to investors in Italy as more fully described below under “TERMS AND CONDITIONS OF THE PUBLIC OFFER”.
CONFLICT OF INTEREST
The Authorised Offerors will receive an upfront commission for the distribution investment service performed in the context of the offer. Further to any such appointment, the distribution commission, received by the Authorised Offerors will create possible conflicts of interest.
No fees will be paid by the Issuer to intermediaries performing the investment services of the collection and transmission of orders or of the mere execution of orders in the context of the distribution of the Notes during the Offer Period and directly or indirectly connected to the MOT through which investors will apply for the Notes.
The Dealer has undertaken to subscribe for a minimum amount of Notes equal to INR 300,000,000 under the Terms Agreement – entered into on July 12, 2016 by the Dealer and the Issuer (the “Terms Agreement”) – irrespective of the outcome of the offer of the Notes.
TERMS AND CONDITIONS OF THE PUBLIC OFFER
The Issuer has agreed to allow the use of these Final Terms and the Prospectus by the Dealer and by any entities appointed as distributors by the Dealer (the “Authorised Offerors”) in connection with an offering of the Notes in Italy (the “Public Offer Jurisdiction”) during the Offer Period (as defined below). The list of the Authorised Offerors (if any) will be published on the following website: xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx.
The offer of the Notes is conducted in Italy only and is addressed to the public at large. Qualified Investors, as defined for by article 2 of the Prospectus Directive as implemented by art. 100 of the Italian Legislative Decree No. 58/1998 as amended from time to time (the “Italian Financial Services Act”) and art. 34-ter paragraph 1 lett. b) of CONSOB Xxxxxxxxxx Xx. 00000 of 14 May 1999 as amended from time to time can only acquire the Notes in the framework of the public offer of the Notes if, and to the extent that, the Total Amount of the Offer has not been exhausted by requests from the public at large.
On the Issue Date, the Notes will be subscribed for by the Dealer acting as principal and then assigned to prospective investors in the context of the offer of the Notes.
The Dealer has undertaken to subscribe for a minimum amount of Notes equal to INR 300,000,000 under the Terms Agreement irrespective of the outcome of the offer of the Notes, save in the case of withdrawal of the offer and cancellation of the issuance of the Notes as provided for by paragraph (iii) below. No undertakings will be made by the Authorised Offerors (if any) or has been made by any third parties to guarantee the outcome of the offer of the Notes in connection of any minimum amount of the Notes.
All offers of Notes will be made only in accordance with the selling restrictions set forth in the Prospectus and the provisions of these Final Terms and in compliance with all applicable laws and regulations, provided that no such offer of Notes shall require the Issuer or the Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive (or supplement a prospectus pursuant to Article 16 of the Prospectus Directive) or to take any other action in any jurisdiction other than as listed above.
(i) Offer Period: From and including July 12, 2016 to and including July 14, 2016 during trading hours on the MOT (i.e.,
9.00 am to 5.30 pm, CET), subject to early closing of the Offer Period as described under paragraph (iii) below.
(ii) Offer Price: The Issue Price, equal to 100 per cent. of the Specified Denomination of each Note.
The Offer Price includes, per Specified Denomination, an upfront commission for the distribution and promotion of the Notes paid by the Dealer to the Authorised Offerors, equal to a maximum amount of
1.50 per cent. (including VAT, if any) of the Specified Denomination of the Notes distributed by each Authorised Offeror.
(iii) Early closing, withdrawal and cancellation, extension:
The Issuer reserves the right, in agreement with the Dealer, to withdraw the Offer and cancel the issuance of the Notes at any time before 07.59am CET on the second open market day immediately preceding the
(iv) Conditions to which the offer is subject:
Issue Date (i.e., July 20, 2016) in the case that any extraordinary changes in the economic and political situation or in the capital, currency and exchange rates markets, either at a national or international level, which, in the judgment of the Issuer and the Dealer, is material and adverse and makes it impractical or inadvisable to proceed with completion of the distribution or the payment for the Notes, will have occurred. The Issuer will inform the public of the withdrawal of the Offer and the cancelation of the issuance of the Notes by means of a notice to be sent to Borsa Italiana S.p.A. and published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx.
For the avoidance of doubt, if any contract has been entered into on behalf of a potential investor and the Issuer exercises such a right, each such potential investor will not be entitled to receive the relevant Notes.
The Offer Period may be closed early as determined by the Issuer, in agreement with the Dealer, (i) in the case that the Notes are distributed for an amount equal to INR 1,500,000,000, and (ii) at any time during the Offer Period provided that an amount of Notes at least equal to INR 300,000,000 has been distributed.
In the case of early closure set out under (i) above, the Dealer will cease to display sell orders on the MOT as soon as the Notes have been distributed for an amount of INR 1,500,000,000. Following this occurrence, the Issuer will promptly inform the public of the Offer Period’s early closure by means of a notice to be sent to Borsa Italiana S.p.A. and published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx.
In the case of early closure set out under (ii) above, the Issuer will inform the public by means of a notice to be sent to Borsa Italiana S.p.A. and published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx by 10.30am CET on the Offer Period’s early closure date. In such a case, the Offer Period will end at 5.30pm CET on the Offer Period’s early closure date as indicated in the relevant notice.
The Issuer reserves the right, in agreement with the Dealer, to extend the Offer Period according to the MOT rules. The Issuer will inform the public of the extension of the Offer Period according to the MOT rules, by means of a notice to be sent to Borsa Italiana
S.p.A. and to be published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx.
The offer of the Notes is conditional on their issue.
The Issuer will determine the final amount of Notes to be issued, subject to the limit of INR 1,500,000,000, which may be increased as provided in paragraph (vi)
(v) Description of the application process:
(vi) Details of the minimum and/or maximum amount of application (whether in number of Notes or aggregate amount to invest):
below. The final amount of the Notes to be issued will depend on, inter alia, the number of the buy orders transmitted to the MOT during the Offer Period.
Prospective investors intending to apply for the Notes during the Offer Period are required to contact their own intermediaries for the purpose of transmitting their buy orders – directly or indirectly through the market’s participants – to the MOT.
BNP Paribas will display continuously during the Offer Period a price equal to the Issue Price for the sale and will display sell orders to match buy orders displayed by the intermediaries connected to the MOT and transmitted to them directly or indirectly by investors.
Noteholders (other than the Dealer) will not enter into any contractual arrangements directly with the Issuer in connection with the distribution or purchase of the Notes. In fact, the relationship between intermediaries and prospective investors will be regulated by the intermediaries’ policies applicable to their carrying out investment services vis-à-vis their clients and also with reference to expenses/commissions to be borne by prospective investors and information provided to them.
By purchasing the Notes, the holders of the Notes are deemed to have knowledge of all the Terms and Conditions of the Notes and to accept the said Terms and Conditions.
Companies providing investment portfolio management services through nominee registration, ("società fiduciarie autorizzate alla gestione patrimoniale di portafogli d'investimento mediante intestazione fiduciaria") as per article 60, paragraph 4, of Legislative Decree No. 415 of 23 July 1996, can transmit buy orders solely on behalf of their clients in compliance with the agreements in place with each of them.
Investors may also submit their applications to participate in the offer of the Notes through parties authorised to perform individual investment portfolio management services pursuant to Italian Financial Services Act and through intermediaries authorised to receive and transmit orders, pursuant to the Italian Financial Services Act, at the conditions provided for by CONSOB regulations from time to time applicable.
Without prejudice to the provisions of paragraph (iii) above regarding the withdrawal of the offer and cancellation of the issuance of the Notes, the Notes will be issued for a minimum amount of INR 300,000,000 based on the underwriting commitment of the Dealer under the Terms Agreement –– up to a maximum amount of INR 1,500,000,000 based on the
(vii) Method and time limits for paying up the Notes and for delivery of the Notes:
decision of the Issuer and on the demand from the investors (the “Total Amount of the Offer”).
The Issuer reserves the right, in agreement with the Dealer, to increase the Total Amount of the Offer during the Offer Period but in any case within the open market day before the Offer Period’s closure date. The Issuer will inform the public of the size increase by means of a notice to be sent to Borsa Italiana S.p.A. and published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx. The Issuer will also publish a revised version of these Final Terms including the increased number and amount of Notes to be issued on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx. In any case, the Dealer will cease to display sell orders on the MOT as soon as the Notes have been distributed for an amount of INR 1,500,000,000 and will start again to display sell orders on the MOT at the date and time indicated in the notice relating to the increase of the issuance’s size.
Minimum amount per buy order: one Note (INR 150,000). There is no maximum number of buy orders which can be transmitted on behalf of a single prospective investor.
The Notes will be sold by the Issuer to the Dealer on a delivery against payment basis on the Issue Date and then be assigned to prospective investors by the intermediaries directly or indirectly connected to the MOT through which such prospective investors have transmitted their buy orders and funds for such buy orders.
Prospective Noteholders will be notified by the relevant Authorised Offeror (if any) of the settlement arrangements in respect of Notes in accordance with their own applicable policies and procedures.
(viii) Xxxxxx and date in which results of the offer are to be made public:
(ix) Procedure for exercise of any right of pre-emption, negotiability of subscription rights and treatment of subscription rights not exercised:
(x) Details of any tranche(s) reserved for certain countries:
(xi) Process for notification to applicants of the amount
A notice relating to the results of the offer of the Notes will be sent to Borsa Italiana S.p.A. and published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx on the Issue Date.
Not Applicable
Not Applicable
The irrevocable buy orders of Notes that have been transmitted to the MOT and caused the relevant
allotted and indication whether dealing may begin before notification is made:
(xii) Amount of any expenses and taxes specifically charged to the Noteholders:
(xiii) Name(s) and address(es), to the extent known to the Issuer, of the Authorised Offerors in the various countries where the offer takes place:
contracts be entered into according to the MOT rules within the date and time of the Offer Period’s closure (even early) will be accepted for the entire amount of such contracts, subject to the issue of the Notes up to the Total Amount of the Offer.
Authorised Offerors (if any) will notify applicants of amounts allotted immediately after the publication of the notice mentioned in paragraph (viii) above and, in any event, before the Issue Date.
No dealings in the Notes may take place prior to the Issue Date.
(A.) Distribution commissions: see above paragraph (ii).
(B.) Administrative and other costs relating to the holding of the Notes (service fees, custodians fees, brokerage fees, financial services etc.): the prospective purchaser is invited to check those costs with its financial intermediary.
The Issuer reserves the right to appoint intermediaries to act as Authorised Offerors during the Offer Period according to the applicable law. Such appointment will be notified to the public by means of a notice published on the website xxx.xxxxxxxxxxxxxxxxxxxxxxx.xxx.
In the context of the collection of buy orders on behalf of their clients and the direct or indirect transmission of buy orders on behalf of their clients or on their own account for the purpose of transmitting all such orders to the MOT, the intermediaries involved in the distribution of the Notes, other than the Authorised Offerors (if any), will perform the investment services of the collection and transmission of orders or of the mere execution of orders, as defined by the Italian Financial Services Act.
LISTING APPLICATION
Application has been made for the Notes to be listed on the Italian Stock Exchange and admitted for a distribution phase and subsequent trading on the Mercato Telematico delle Obbligazioni (MOT), EuroMOT segment, organised and managed by Borsa Italiana S.p.A.
The Notes have already been admitted to listing before the commencement of the distribution phase on the MOT and the final amount of Notes that are issued on the Issue Date will be admitted to trading on the MOT on the date specified by means of a notice of Borsa Italiana S.p.A.
ANNEX
This Annex is to be read in conjunction with and forms part of the Prospectus and the Final Terms. Although there is no legal obligation whatsoever, under any applicable law, for the Issuer or the Dealer to provide you with such information as mentioned herein, this Annex is meant to answer some practical questions that you might have regarding the Notes in general terms only. It does not contain all the information which may be important to you. You should read the terms and conditions of the Notes included in the Prospectus and the Final Terms together with the more detailed information contained in the remainder of the Prospectus. You should carefully consider, amongst other things, the risks set out in the Prospectus and in the Final Terms. In addition, we urge you to consult with your investment, legal, accounting, tax and other advisors with respect to any investment in the Notes. The information contained in this section is subject in its entirety to the terms and conditions of the Notes included in the Prospectus and the Final Terms
What are the Notes?
The Notes are debt securities issued by the International Bank for Reconstruction and Development (the "Issuer"). At maturity, the Notes entitle the Noteholder to receive from the Issuer the Final Redemption Amount of INR 150,000 per Calculation Amount plus the Fixed Interest Amount with respect to the Maturity Date, payable in EUR and determined by the Calculation Agent on the relevant Rate Fixing Date. In addition, the Noteholder will receive the Fixed Interest Amount of INR 8,700 per Calculation Amount annually during the term of the Notes, payable in EUR and determined by the Calculation Agent on the relevant Rate Fixing Date. All payments on the Notes are subject to the Issuer’s credit risk (insolvency or payment default of the Issuer) and foreign exchange risk since the interest and redemption amounts are expressed in Indian Rupee (“INR”) but paid in Euro (“EUR”)
Where does my money go?
The net proceeds from the sale of the Notes will be used by IBRD in its general operations in order to provide financing, risk management products, other financial services, access to experts and a pool of knowledge in development-related disciplines to the governments of IBRD’s borrowing members so that they can achieve equitable and sustainable economic growth in their national economies. Projects supported by XXXX undergo a rigorous review and approval process aimed at safeguarding equitable and sustainable economic growth, including early screening to identify environmental and social impacts and designing concrete mitigation actions. IBRD integrates five cross cutting themes into its activities helping its borrowing members create sustainable development solutions: climate change; gender; jobs; public-private partnerships; and fragility, conflict and violence.
Will I receive income?
Yes, the Noteholder will receive the Fixed Coupon Amount of INR 8,700 per Calculation Amount annually during the term of the Notes, payable in EUR and determined by the Calculation Agent on the relevant Rate Fixing Date.
Can I redeem early?
No. There is no provision in the Notes for a Noteholder's early redemption right. However, application will be made for the Notes to be admitted to listing and to trading on the Mercato Telematico delle Obbligazioni (MOT), EuroMOT segment, organised and managed by Borsa Italiana
S.p.A. and BNP Paribas has informed the Issuer that, except in the case of exceptional market circumstances, it will, on a best efforts basis, endeavour to make a secondary market during open business hours. Also, a brokerage fee may be applied by any financial intermediary involved. The Noteholders are invited to check with its financial intermediary if brokerage fees apply.
Can the Notes be redeemed early by the Issuer?
No. There is no provision in the Notes for the Issuer's early redemption right.
What are the fees?
The investors will purchase the Notes at an Offer Price of 100%. This price includes, per Specified Denomination of INR 150,000, an upfront commission for the distribution and promotion of the Notes paid upfront by the Dealer to the Authorised Offerors (i.e., the distributors), if any, equal to a
maximum amount of 1.50% (including VAT, if any) of the INR 150,000 Specified Denomination of the Notes distributed by each Authorised Offeror.
How will the fees impact my investment?
The fees retained by the Authorised Offerors will not affect the amounts due in accordance with the terms and conditions of the Notes.
What is the Issuer’s credit rating?
The Issuer’s long-term senior debt rating is, as at the date hereof, Aaa (Moody's Investor Services) and AAA (S&P). Investors should note, however, that the ratings may not reflect the potential impact of all risks related to structure, market and other factors that may affect the value of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.
What are some of the risks in owning the Notes?
Investing in the Notes involves a number of risks, including currency risks. We have described the most significant risks relating to the Notes in the Prospectus (under the heading “Risk Factors” at page 14 and following) and the Final Terms (under Term 23 “Additional Risk Factors” under the heading “General provisions applicable to the Notes”).
Are the Notes a suitable and appropriate investment for me?
The Notes can only be offered to the investors by the Authorised Offerors if they are appropriate and - if necessary, in light of the investment services provided by the Authorised Offeror to the relevant investor - suitable for the investors.
Should an investor decide to invest in the Notes, without getting any advice from its bank, its bank should in any case warn him/her if the Notes are not appropriate or, if necessary according to applicable laws and regulations, suitable for him/her.
Will I always be able to sell my Notes in a secondary market prior to the Maturity Date?
There is no assurance as to the development or liquidity of any trading market for the Notes. Therefore, investors may not be able to sell their Notes easily or at prices that would provide them with a yield comparable to similar investments that have a developed secondary market. However, application will be made by the Dealer for the Notes to be admitted to listing and to trading on the Mercato Telematico delle Obbligazioni (MOT), EuroMOT segment, organised and managed by Borsa Italiana S.p.A. and BNP Paribas has informed the Issuer that, except in the case of exceptional market circumstances, it will, on a best efforts basis, endeavour to make a secondary market during open business hours. Also, a brokerage fee may be applied by any financial intermediary involved. The Noteholders are invited to check with its financial intermediary if brokerage fees apply.
Are there any taxes payable by me in relation to the Notes?
The Schedule contains a summary with regard to certain tax aspects which are of significance in connection with the Notes for certain jurisdictions. This summary does not purport to exhaustively describe all possible tax aspects and does not deal with specific situations which may be of relevance for individual potential investors. It is recommended that potential purchasers of the Notes consult with their legal and tax advisors as to the tax consequences of the purchase, holding or sale of the Notes under the tax laws of the country of which they are resident for tax purposes.
Where and in which form are the Notes held?
The Notes will initially be held by Euroclear Bank N.V./S.A. and Clearstream Banking S.A. (the "Clearing Systems") in the form of a global certificate which will be exchangeable for definitive securities only in the exceptional circumstances described in the Prospectus. For as long as any Notes are held by the Clearing Systems, payments of the coupon and principal will be made through the Clearing Systems. Investors must therefore rely on the Clearing System to distribute all payments attributable to the Notes which are received from the Issuer. Accordingly, investors will be exposed to the credit risk of, and default risk in respect of, the Clearing Systems, as well as the Issuer. Investors should note that neither the Issuer nor the Registrar (Citibank, N.A., London Branch) shall be responsible for the acts or omissions of the Clearing Systems. Furthermore, investors should be aware
of the fact that the Clearing Systems may charge fees for the opening and operation of an investment account, transfers of Notes, custody services and on payments of interest, principal and other amounts or delivery of notes. Potential investors are therefore advised to investigate the basis on which any such fees will be charged on the Notes.
SCHEDULE TO THE FINAL TERMS
TAXATION
You should carefully consider the matters set forth under “Tax Matters” in the accompanying Prospectus. This summary supplements the section “Tax Matters” in the accompanying Prospectus and is subject to the limitations and exceptions set forth therein.
The following is only a general description of certain tax considerations relating to the Notes with regard to a limited number of jurisdictions. It does not purport to be a complete analysis of all tax considerations relating to the purchase, beneficial ownership, and disposition of the Notes.
Prospective purchasers of Notes should consult their tax advisers as to the consequences under the tax laws of the country of which they are resident for tax purposes.
This summary is based upon the law as in effect on the date of these Final Terms and is subject to any change in law that may take effect after such date (or even before with retroactive effect).
The Issuer makes no representation or warranty, whether express or implied, as to the completeness or accuracy of this summary.
ITALIAN TAXATION
Income Tax
Under the current legislation, pursuant to the provisions of Legislative Decree No. 239 of 1 April 1996, as amended and restated (Law 239), payments of interest and other proceeds in respect of the Notes:
(i) will be subject to imposta sostitutiva at the rate of 12.5 per cent. in the Republic of Italy levied as final tax if made to beneficial owners who are: (i) individuals resident in the Republic of Italy for tax purposes; (ii) Italian resident non-commercial partnerships; (iii) Italian resident public and private entities, other than companies, not carrying out commercial activities as their exclusive or principal purpose (including the Italian State and public entities); and (iv) Italian resident entities exempt from corporate income tax.
Payments of interest and other proceeds in respect of the Notes will not be included in the general taxable base of the above mentioned individuals, partnerships and entities.
The imposta sostitutiva will be levied by the Italian resident qualified financial intermediaries that will intervene, in any way, in the collection of interest and other proceeds on the Notes or in the transfer of the Notes;
(ii) will be subject to imposta sostitutiva at the rate of 12.5 per cent in the Republic of Italy levied as provisional tax if made to beneficial owners who are: (i) individuals resident in the Republic of Italy for tax purposes; (ii) Italian resident non-commercial partnerships; and (iii) Italian resident public and private entities, other than companies; any of them engaged in an entrepreneurial activity – to the extent permitted by law – to which the Notes are connected;
(iii) will not be subject to the imposta sostitutiva if made to beneficial owners who are: (i) Italian resident corporations, commercial partnerships or permanent establishments in Italy of non- resident corporations to which the Notes are effectively connected; (ii) Italian resident collective investment funds, SICAVs, Italian resident pension funds referred to in Legislative Decree No. 124 of 21 April 1993, as further superseded by Legislative Decree 5 December 2005, No. 252 and Italian resident real estate investment funds established pursuant to article 37 of Legislative Decree No. 58 of February 24, 1998 and article 14-bis of law No. 86 of January 25, 1994; (iii) Italian resident individuals who have entrusted the management of their financial assets, including the Notes, to an Italian authorised financial intermediary and have
opted for the so-called risparmio gestito regime according to Article 7 of Legislative Decree No. 461 of 21 November 1997 - the “Asset Management Option” and (iv), non Italian resident with no permanent establishment in Italy to which the Notes are effectively connected, the exemption applies provided that the non Italian investor promptly file with the authorized financial intermediary an appropriate affidavit (autodichiarazione) stating that the investor is not resident in Italy for tax purposes.
Interest and other proceeds accrued on the Notes held by Italian resident corporations, commercial partnerships, individual entrepreneurs as well as Italian resident public and private entities, other than companies, holding Notes in connection with entrepreneurial activities or permanent establishments in Italy of non-resident corporations to which the Notes are effectively connected, are included in the taxable base for the purposes of: (i) corporate income tax (imposta sul reddito delle società, IRES); or
(ii) individual income tax (imposta sul reddito delle persone fisiche, IRPEF) plus local surtaxes, if applicable; under certain circumstances, such interest is included in the taxable basis of the regional tax on productive activities (imposta regionale sulle attività produttive, IRAP).
If holders of Notes subject to such final tax hold the Notes through an authorised intermediary in Italy having asset management power over such Notes, such holders may opt to pay a final 26 per cent. tax levied by the intermediary on all interest, other payments and gains deriving from such management on an annual basis ("managed savings option"). However, in such case, interest, other payments and gains arising from the Notes will be taxable for a portion equal to 48.08 per cent. only. If holders of Notes subject to such substitute tax on account of income taxes hold Notes through such an assets manager, interest, other payments and gains will be taxed as part of their overall income.
If interest are paid outside of Italy by an entity other than an authorised intermediary in Italy to residents of Italy who would otherwise be subject to the above 12.5 per cent. final tax, holders of Notes must include the payments received in their income tax return and the payments shall be subject to a different substitute tax at a 12.5 per cent. rate or, at the holders' option, to income taxes at the applicable rates to their overall income with a tax credit for taxes paid abroad.
If the Notes are held by an Italian pension fund and are deposited with an authorised intermediary, interest, premium and other income relating to the Notes and accrued during the holding period will not be subject to the substitute tax, but must be included in the result of the relevant portfolio accrued at the end of the tax period for an amount of 62.5 per cent., to be subject to a 20 per cent. substitute tax.
If the Notes are held by an Italian authorised investment fund (organismi di investimento collettivo del risparmio – O.I.C.R.) or a SICAV (società di investimento a capitale variabile) investing in securities and are deposited with an authorised intermediary, interest, premium and other income relating to the Notes and accrued during the holding period will not be subject to the substitute tax.
If the Notes are held by an Italian real estate investment fund (fondi immobiliari) or a SICAF (società di investimento a capitale fisso) investing and are deposited with an authorised intermediary, interest, premium and other income relating to the Notes and accrued during the holding period will not be subject to the substitute tax.
Capital gains
Any capital gain realised upon the sale for consideration or redemption of Notes would be treated for the purpose of corporate income tax and of individual income tax as part of the taxable business income of Noteholders (and, in certain cases, depending on the status of the Noteholders, may also be included in the taxable basis of IRAP), and therefore subject to tax in Italy according to the relevant tax provisions, if derived by Noteholders who are:
(a) Italian resident corporations;
(b) Italian resident commercial partnerships;
(c) permanent establishments in Italy of foreign corporations to which the Notes are effectively connected; or
(d) Italian resident individuals carrying out a commercial activity, as to any capital gains realised within the scope of their commercial activity.
Xxxxx realised on the disposal or redemption of Notes by residents of Italy who are individuals not acting in a business capacity or by non-business partnerships and similar organisations will be subject to a final capital gains tax currently at the rate of 12.5 per cent. The tax applies to all gains and losses realised in the relevant year and losses may be carried forward to the subsequent four years. Said holders of Notes may opt to pay capital gains tax declaring the gains in their annual income tax return or, if the Notes are deposited with an authorised intermediary in Italy, authorising the intermediary to xxxx the said capital gains tax ("administered savings option"). If they have elected the managed savings option, a portion equal to 48.08 per cent. of the gains arising from the Notes will be subject to the tax applicable thereto. Instead, gains realised by residents of Italy who are individuals acting in a business capacity, partnerships, limited partnerships, corporations or permanent establishments of foreign corporations shall be subject to income or corporation taxes as part of the overall business income (and, in certain cases, may also be included in the taxable net value of production for IRAP purposes).
Gains realised by investment funds (organismi di investimento collettivo del risparmio – O.I.C.R.) or SICAVs (società di investimento a capitale variabile) will be included in the result of the portfolio accrued at the end of the tax period. The fund will not be subject to taxation on such results.
Gains realised by Italian real estate investment funds (complying with the definition as amended pursuant to Law Decree No. 78 of 31 may 2010, converted into Law No. 122 of 30 July 2010) or by SICAFs, to which the provisions of Law Decree No. 351 of 25 September 2001, as subsequently amended, apply, are subject neither to capital gains tax nor to any other income tax in the hands of the real estate fund or SICAF.
Xxxxx realised by Italian pension funds will be included in the result of the relevant portfolio accrued at the end of the tax period for an amount of 62.5 per cent., to be subject to a 20 per cent. substitute tax.
Pursuant to Article 23 of Presidential Decree of 22 December 1986, No. 917, any capital gains realised, by non-Italian residents without a permanent establishment in Italy to which the Notes are effectively connected, through the sale for consideration or redemption of Notes are exempt from taxation in Italy to the extent that the Notes are listed on a regulated market in Italy or abroad and in certain cases subject to filing of required documentation, even if the Notes are held in Italy. The exemption applies provided that the non-Italian investor promptly file with the authorized financial intermediary an appropriate affidavit (autodichiarazione) stating that the investor is not resident in Italy for tax purposes.
The Notes are excluded from the tax base of the Italian inheritance tax according to article 12 of Legislative Decree 346/1990 and Article 12, paragraph 13-bis of Legislative Decree 461/1997.
EU DIRECTIVE ON THE TAXATION OF SAVINGS INCOME
On 3 June 2003, the Council of the European Union adopted the EU Directive No. 2003/48/EC regarding the taxation of savings income (the “European Savings Directive”). According to the European Savings Directive, each member State of the European Union (a Member State) is required to provide to the Tax Authorities of other States of the European Union details of the interest payments by a person within its jurisdiction to individuals resident in that other State. However, for a transitional period, Austria may instead apply a withholding system in relation to such payments, deducting tax at rates rising over time to 35%.
In any case, the transitional period is to terminate at the end of the first full tax year following agreement by certain non-EU countries to the exchange of information relating to such payments.
A number of non-EU countries, including Switzerland and certain dependent or associated territories of certain Member States, have agreed to adopt similar measures (either provision of information or transitional withholding) in relation to payments made by a paying agent within its jurisdiction to, or collected by such a paying agent for an individual resident or certain limited types of entity established in a Member State. In addition, the Member States have entered into provision of information or transitional withholding arrangements with certain of those dependent or associated territories in relation to payments made by a paying agent in a Member State to, or collected by such a paying agent for an individual resident or certain limited types of entity established in one of those territories.
The Council of the European Union formally adopted a Council Directive amending the Directive on
24 March 2014 (the Amending Directive). The Amending Directive broadens the scope of the requirements described above and requires Member States to adopt the national legislation necessary to comply with the Amending Directive by 1 January 2016. The changes made under the Amending Directive extend the scope of the Directive to payments made to, or collected for, certain other entities and legal arrangements. They also broaden the definition of "interest payment" to cover income that is equivalent to interest.
However, on 10 November 2015, the Council of the European Union approved the Council Directive 2015/2060/EU (published in the Official Journal of the EU on 18 November 2015) which has repealed the EU Savings Directive with effect from 1st January 2017 in the case of Austria and from 1 January 2016 in the case of all other Member States. The repeal of the Savings Directive is needed in order to prevent overlap between the EU Savings Directive and a new automatic exchange of information regime to be implemented under Council Directive No. 2011/16/EU on Administrative Cooperation in the field of Taxation (as amended by Council Directive No. 2014/107/EU) and to save costs both for tax authorities and economic operators.
Italy has implemented the European Savings Directive through Legislative Decree No. 84 of 18 April 2005 (the Decree No. 84). Under Decree No. 84, subject to a number of important conditions being met, in the case of interest paid starting from 1 July 2005 (including the case of interest accrued on the Certificates at the time of their disposal) to individuals which qualify as beneficial owners of the interest payment and are resident for tax purposes in another Member State or in certain associated territories of Member States, Italian paying agents (i.e., banks, investment firms (società di intermediazione mobiliare – SIM), fiduciary companies, Italian management company (società di gestione del risparmio – SGR) resident for tax purposes in Italy, permanent establishments in Italy of non-resident persons and any other economic operator resident for tax purposes in Italy paying interest for professional or commercial reasons) shall report to the Italian tax authorities details of the relevant payments and personal information on the individual beneficial owner. Such information is transmitted by the Italian Tax Authorities to the competent foreign tax authorities of the State of residence of the beneficial owner. In certain circumstances, the same reporting requirements must be complied with also in respect of interest paid to an entity established in another Member State, other than legal persons (with the exception of certain Finnish and Swedish entities), whose profits are taxed under general arrangements for business taxation and, in certain circumstance, undertakings for collective investments in transferable securities (UCITS).