5 year KBC IFIMA S.A. (LUX) Bond in NOK with a fixed interest rate

ISIN-code:  XS1916214171

  • This is the issue of a bond in Norwegian Krone (NOK), which bears a exchange rate risk in relation to the conversion of the amounts from NOK to EUR.
  • Annual coupon of 2.20% gross (in NOK), i.e. NOK 220 (gross), except in the case of bankruptcy or the risk of bankruptcy of the issuer or the guarantor.
  • Held free of charge in your KBC Custody Account.
  • This product (the “bonds”) is a debt instrument intended for investors who have the necessary knowledge or experience to assess the benefits and risks of an investment in this type of product, based on their financial situation (especially investors who are familiar with interest rates and exchange rates).

From 3 December 2018 (9 a.m.) through 21 December 2018 (4 p.m.) (unless the subscription period is closed early), you can subscribe to a non-subordinated1 Note issued by KBC IFIMA S.A. (LUX) (“the issuer”), guaranteed by KBC Bank SA (“the guarantor”).

Main features

Term

5 year

Issue date 3 January 2019

Maturity Date

3 January 2024

Issue Price

101.00%, i.e. NOK 10,100 per denomination.

Amount repaid at the Maturity Date

100.00% of the invested amount in NOK (excluding the placement fee), i.e. NOK 10,000 per denomination, except in the event of bankruptcy or risk of bankruptcy of the issuer or the guarantor.

Investment objective

An investment in this product may be an attractive re-investment in NOK.

Coupon

  • Annual coupon of 2.20% gross (in NOK) per denomination, i.e. NOK 220 per denomination, yearly payable on 3 January starting on 3 January 2020 up to and including the maturity date, except in the event of bankruptcy or risk of bankruptcy of the issuer or the guarantor.
  • Gross yield of 1.99% (in NOK) based on an issue price of 101.00% and based on a redemption of 100.00% on the maturity date. This represents a net yield of 1.33% (in NOK) after deduction of withholding tax of 30.00%, except in the event of bankruptcy or risk of bankruptcy of the issuer or the guarantor. The yield does not take into account any other charges, such as those for the safekeeping of securities on a custody account and / or any other applicable tax regime.
Witholding tax The income resulting from the bonds, which is collected in Belgium, is subject to withholding tax of 30,00% on the gross amount. The withholding tax constitutes the final tax for Belgian individuals, which means that any income from the bonds would not have to be declared in the annual tax return. The above mentioned taxation applies to the average non-professional client-physical person residing in Belgium. The tax treatment depends on your individual circumstances and may change in the future.
Taxes on stock market transactions On the basis of current tax legislation, the rate of the tax on stock market transactions (TOB) when selling before maturity date is equal to 0.12% (with a maximum charge of EUR 1.300).
Publication of the product's value Investors can check the price of the bonds in their custody account or request it at any KBC branch.


Governing law

The bonds, the guarantee and the coupons are governed by English law. The ranking of claims on the guarantee and the status of the guarantee are governed by Belgian law.

Guarantor rating

Moody’s: Aa3 (positive outlook)

S&P: A+ (stable outlook)

Fitch: A+ (stable outlook)

These ratings are purely indicative and do not constitute a recommendation to buy, sell or hold the bonds issued by the Issuer. For more details on these ratings, see: the ‘credit ratings’ section of the ‘investor relations’ page on www.kbc.com.

Most importatnt risks

Investors are being asked to inspect all the risks inherent in the product and in particular:

(i) The credit risk - Repayment and interest payments depend on the solvency of KBC IFIMA S.A. (the issuer) and KBC Bank SA (the guarantor). In the event of bankruptcy or risk of bankruptcy of the issuer or the guarantor, investors could lose part or all of their invested amount and the interest amounts and these bonds could be cancelled in whole or in part or converted into capital instruments (shares), depending on the decision of the regulator (the so called “bail-in”);

 

(ii) The foreign exchange rate risk - An investment in the bonds denominated in NOK represents a risk relating to the conversion of NOK into EUR with respect to interest amounts and to the redemption of the investment amount on the maturity date. In the case of conversion into EUR, investors may lose some of the interest and/or the amount invested, as a result of the depreciation of the NOK against EUR during the term of the bond. This risk is more pronounced for investors who do not have a NOK account and could have their payments automatically converted into EUR at the exchange rate on the relevant payment dates;

 

(iii) The liquidity risk - The bonds are not listed on a regulated market. It is possible that investors will not be able to sell their bonds before the maturity date. If it is still possible to sell the bonds, they will be sold at the price determined by KBC Bank SA which can act as a counterparty. KBC Bank SA does not commit itself to systematically buying back the bonds;

 

(iv) The risk on fluctuations of the price of the product (market risk) – The price of the bonds can fluctuate due to various factors such as interest rate movements and market volatility. Investors seeking to sell their bonds before the maturity date will have to sell them at a price (excluding trading fees, taxes on stock transactions and possible taxes), which can be determined by KBC Bank SA in its capacity as counterparty. This could result in a gain or loss on the capital invested in NOK (excluding the placement fee), i.e. NOK 10,000 per denomination. Investors can check the price of the bonds in their custody account or request it at any KBC branch.

 

The risk factors are described on pages 33 et seq. of the Base Prospectus and on page 3-4 of the product info sheet.

Charges

Please take into account:

  • Charges included in the issue price:

(i) Placement fee: 1,00% borne by the investor;

(ii) Running charges:

a. Distribution fee borne by the investor: 0.25% per year, i.e. 1.25% % if the bonds are held to the maturity date.

b. Other running charges borne by the investor: up to 0.75% per year, i.e. up to 3.75% if the obligations are held to the maturity date.

  • Exchange rate fee: at KBC Bank SA, for each exchange transaction, an exchange rate fee is charged that is in line with 1.00% of the exchange rate in force on the relevant payment date. Depending on the arrangement that exists between investors and their KBC branch this exchange rate fee may be deviated from;
  • Trading fee: when the bonds are sold before the maturity date,a trading fee of up to 1.00% will be due.
  • All rates and charges on securities transactions applying at KBC Bank SA can be found at https://www.kbc.be/retail/en/redirects/tarieven-overzicht-vergoedingen-2018.html.

1 Unsorbindated bonds are bonds that in case of bankruptcy or liquidation of the undertaking are refunded after the preferred creditors but before the holders of subordinated bonds and the shareholders.

More information with regard to complaints can be found on: https://www.kbc.be/retail/en/contact/suggestions-or-complaints.html

 

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