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

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

  • Offer in Norwegian Krone (NOK), which bears a exchange rate risk in relation to the conversion of the amounts from NOK to EUR.
  • On a yearly basis you are entitled to a coupon of 2,10 % gross (in NOK), namely NOK 210 (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 (more in particular, investors who are familiar with interest rate and exchange rates).

From 2 May 2018 (9 a.m.) through 1 June 2018 (4 p.m.) (unless the subscription period is closed early), you can subscribe to a non-subordinated Note issued by KBC IFIMA S.A. (LUX) (“the issuer”), guaranteed by KBC Bank (“the guarantor”).

Main features

Term

5 year

Issue date 7 June 2018

Maturity Date

7 June 2023

Issue Price

101,00%, namely NOK 10.100 per denomination.

Amount repaid at the Maturity Date

100,00% of the invested amount in NOK (without placement fee of 1,00%), namely NOK 10.000 per denomination, except in case bankruptcy or risk of bankruptcy of the issuer or the guarantor.

Investment objective

An investment in this product can be attractive as a re‐investment in Norwegian Krone.

Coupon

  • On a yearly basis you are entitled to a coupon of 2,10% (gross in NOK) per denomination, namely NOK 210 (gross) per denomination, payable 7 June of each year, from 7 June 2019 up to and including the maturity date, except in case of bankruptcy or risk of bankruptcy of the issuer or the guarantor.
  • The gross yield is 1,89% (in NOK) based on the issue price of 101,00% and starting from a repayment of 100,00% on the maturity date. The yield is 1,26% (in NOK) after the withholding taks of 30,00%. The yield does not take into account any other charges such as those for safekeeping the securities on a securities account and / or any other applicable tax regime.
Witholding tax The income resulting from the bonds, which is collected in Belgium, is subject to a withholding tax of 30,00% on the gross amount. The withholding tax would constitute 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 abovementioned taxation applies to the average non-professional client-physical person, resident of Belgium. The tax treatment depends on your individual circumstances and may change in the future.
Taxes on stock market transactions Based on the 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 of EUR 1.300).
Publication of the product's value Investors can check the price of the Notes 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.

Rating van de Garant

Moody’s A1 (stable 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 Notes 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 NV (the Guarantor). In the event of bankruptcy or risk of bankruptcy of the Issuer or the Guarantor, it is possible that the investor loses part or all of his 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 as to the reimbursement of the investment amount at the maturity date. In the case of conversion into EUR, investors may lose a part of the interest and/or of the amount invested, as a result of the depreciation of 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, these bonds will be sold at the price determined by KBC Bank NV which can act as a counterparty. KBC Bank NV 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 fee, taxes on stock transactions and possible taxes) which by KBC Bank NV, which can act as counterparty, can be determined. This could result in a gain or loss on the capital invested in NOK (without 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 in the Base Prospectus on pages 28 et seq., and in the Product info sheet on page 3.

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, so 1,25% % if the obligationsare held to the maturity date.

b. Other running charges borne by theinvestor: up to 0,75%, to receive annually byKBC Bank NV for distribution and promotionof the obligations, so up to 3,75% if theobligations are held to the maturity date.

  • Exchange rate fee: at KBC Bank NV, for each exchangetransaction, an exchange rate fee that in line 1,00% of theexchange rate in force on the relevant payment date is charged.Depending on the arrangement that exists between investorsand their KBC branch, a deviation from this exchange rate fee ispossible;
  • Trading fee: When selling the bonds for the maturity date, atrading fee of up to 1,00% will be due.- All rates and charges on securities transactions applying at KBCBank NV can be found at https://www.kbc.be/particulieren/nl/redirects/tarievenoverzicht-vergoedingen-2018.html.

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