Company Announcements

Issue of Debt

Source: RNS
RNS Number : 6765W
Inter-American Development Bank
18 April 2019
 

 

PRICING SUPPLEMENT

Inter-American Development Bank

Global Debt Program

Series No: 466

Tranche No. 3

U.S.$100,000,000 3.000 percent Notes due February 21, 2024 (the "Notes") as from April 18, 2019 to be consolidated and form a single series with the Bank's U.S.$2,000,000,000 3.000 percent Notes due February 21, 2024, issued on February 21, 2014 (the "Series 466 Tranche 1 Notes") and the Bank's U.S.$100,000,000 3.000 percent Notes due February 21, 2024, issued on October 10, 2018 (the "Series 466 Tranche 2 Notes")

 

Issue Price: 102.926 percent plus 57 days' accrued interest

 

 

 

Application has been made for the Notes to be admitted to the
Official List of the United Kingdom Listing Authority and
to trading on the London Stock Exchange plc's
Regulated Market

 

 

 

Morgan Stanley

 

 

 

The date of this Pricing Supplement is April 16, 2019.

 

Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") set forth in the Prospectus dated January 8, 2001 (the "Prospectus") (which for the avoidance of doubt does not constitute a prospectus for the purposes of Part VI of the United Kingdom Financial Services and Markets Act 2000 or a base prospectus for the purposes of Directive 2003/71/EC of the European Parliament and of the Council).  This Pricing Supplement must be read in conjunction with the Prospectus.  This document is issued to give details of an issue by the Inter-American Development Bank (the "Bank") under its Global Debt Program and to provide information supplemental to the Prospectus.  Complete information in respect of the Bank and this offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus.

MiFID II product governance / Retail investors, professional investors and ECPs target market - See "General Information-Additional Information Regarding the Notes-Matters relating to MiFID II" below.

Terms and Conditions

The following items under this heading "Terms and Conditions" are the particular terms which relate to the issue the subject of this Pricing Supplement.  These are the only terms which form part of the form of Notes for such issue.  The master fiscal agency agreement, dated as of December 7, 1962, as amended and supplemented from time to time, between the Bank and the Federal Reserve Bank of New York, as fiscal and paying agent, has been superseded by the Uniform Fiscal Agency Agreement, dated as of July 20, 2006 (the "New Fiscal Agency Agreement"), as may be amended, restated, superseded or otherwise modified from time to time, between the Bank and the Federal Reserve Bank of New York, as fiscal and paying agent.  All references to the "Fiscal Agency Agreement" under the heading "Terms and Conditions of the Notes" and elsewhere in the Prospectus shall be deemed references to the New Fiscal Agency Agreement.

 

 

1.

(a) Series No.:

466

 

 

 

(b) Tranche

3

 

 

2.

Aggregate Principal Amount:

U.S.$100,000,000

As from the Issue Date, the Notes will be consolidated and form a single series with the Series 466 Tranche 1 Notes and the Series 466 Tranche 2 Notes.

 

 

3.

Issue Price:

U.S.$103,401,000, which amount represents the sum of (a) 102.926 percent of the Aggregate Principal Amount plus (b) the amount of U.S.$475,000 representing 57 days' accrued interest, inclusive

 

 

4.

Issue Date:

April 18, 2019

 

 

5.

Form of Notes
(Condition 1(a)):


Book-entry only (not exchangeable for Definitive Fed Registered Notes, Conditions 1(a) and 2(b) notwithstanding)

 

 

6.

Authorized Denomination(s)
(Condition 1(b)):

 

Book-entry only, U.S.$1,000 and integral multiples thereof

 

 

7.

Specified Currency
(Condition 1(d)):


United States Dollars (U.S.$) being the lawful currency of the United States of America

 

 

8.

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



U.S.$

 

 

9.

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


U.S.$

 

 

10.

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


February 21, 2024

 

 

11.

Interest Basis
(Condition 5):


Fixed Interest Rate (Condition 5(I))

 

 

12.

Interest Commencement Date
(Condition 5(III)):


February 21, 2019

 

 

13.

Fixed Interest Rate (Condition 5(I)):

(a)  Interest Rate:



3.000 percent per annum

 

 

 

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

Semi-annually in arrear on February 21 and August 21 in each year, commencing on August 21, 2019.

Each Interest Payment Date is subject to adjustment in accordance with the Following Business Day Convention with no adjustment to the amount of interest otherwise calculated.

 

 

 

(c)  Fixed Rate Day Count Fraction(s):

30/360

 

 

 

14.

Relevant Financial Center:

New York and London

 

 

15.

Relevant Business Days:

New York and London

 

 

16.

Issuer's Optional Redemption (Condition 6(e)):


No

 

 

17.

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


No

 

 

18.

Governing Law:

New York

 

 

19.

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.

 

 

 

(b)  United Kingdom:

The Manager represents and agrees that it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 with respect to anything done by it in relation to such Notes in, from or otherwise involving the United Kingdom.

 

 

 

 

(c)  General:

No action has been or will be taken by the Issuer 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 Manager 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:

Application has been made for the Notes to be admitted to the Official List of the United Kingdom Listing Authority and to trading on the London Stock Exchange plc's Regulated Market with effect from the Issue Date.

2.

Details of Clearance System Approved by the Bank and the
Global Agent and Clearance and
Settlement Procedures:

 

Federal Reserve Bank of New York; Euroclear Bank S.A./N.V.; Clearstream, Luxembourg

 

3.

Syndicated:

No

4.

Commissions and Concessions:

0.002327% of the Aggregate Principal Amount

5.

Estimated Total Expenses:

None. The Dealer has agreed to pay for all material expenses related to the issuance of the Notes.

6.

Codes:

 

 

(a)  Common Code:

103536855

 

(b)  ISIN:

US4581X0CF37

 

(c)  CUSIP:

4581X0CF3

7.

Identity of Dealer:

Morgan Stanley & Co. International plc

         

 

General Information

Additional Information Regarding the Notes

1.         Matters relating to MiFID II

The Bank does not fall under the scope of application of the MiFID II regime.  Consequently, the Bank does not qualify as an "investment firm", "manufacturer" or "distributor" for the purposes of MiFID II.

MiFID II product governance / Retail investors, professional investors and ECPs target market - Solely for the purposes of the manufacturer's product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties, professional clients and retail clients, each as defined in MiFID II; and (ii) all channels for distribution of the Notes are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into consideration the manufacturer's target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the manufacturer's target market assessment) and determining appropriate distribution channels.

For the purposes of this provision, the expression MiFID II means Directive 2014/65/EU, as amended.

 

2.         United States Federal Income Tax Matters

            The following supplements the discussion under the "Tax Matters" section of the Prospectus regarding the U.S. federal income tax treatment of the Notes, and is subject to the limitations and exceptions set forth therein.  Any tax disclosure in the Prospectus or this pricing supplement is of a general nature only, is not exhaustive of all possible tax considerations and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular prospective investor.  Each prospective investor should consult its own tax advisor as to the particular tax consequences to it of the acquisition, ownership, and disposition of the Notes, including the effects of applicable U.S. federal, state, and local tax laws and non-U.S. tax laws and possible changes in tax laws.

 

            Due to a change in law since the date of the Prospectus, the second paragraph of "-Payments of Interest" under the "United States Holders" section should be updated to read as follows: "Interest paid by the Bank on the Notes constitutes income from sources outside the United States and will generally be "passive" income for purposes of computing the foreign tax credit."

 

Subject to the discussion below regarding amortizable bond premium, a United States holder will generally be taxed on interest on the Notes as ordinary income at the time such holder receives the interest or when it accrues, depending on the holder's method of accounting for tax purposes.  However, the portion of the first interest payment on the Notes that represents a return of the 57 days of accrued interest that a United States holder paid as part of the Issue Price of the Notes will not be treated as an interest payment for United States federal income tax purposes, and will accordingly not be includible in income. 

 

Additionally, because the purchase price of the Notes exceeds the principal amount of the Notes, a United States holder may elect to treat the excess (after excluding the portion of the purchase price attributable to accrued interest) as amortizable bond premium.  A United States holder that makes this election would reduce the amount required to be included in such holder's income each year with respect to interest on the Notes by the amount of amortizable bond premium allocable to that year, based on the Note's yield to maturity.  If a United States holder makes an election to amortize bond premium, the election would apply to all debt instruments, other than debt instruments the interest on which is excludible from gross income, that the United States holder holds at the beginning of the first taxable year to which the election applies or that such holder thereafter acquires, and the United States holder may not revoke the election without the consent of the Internal Revenue Service.

 

Upon the sale, redemption or retirement of the Notes, a United States holder will generally recognize capital gain or loss equal to the difference, if any, between the amount realized by such holder, excluding any amounts attributable to accrued but unpaid interest (which will be treated as interest payments), and such holder's tax basis in the Notes.  A United States holder's adjusted tax basis in the Notes generally will equal the cost of the Notes to the United State holder, reduced by any bond premium that the United States holder previously amortized with respect to the Notes.  Capital gain of individual taxpayers from the sale, redemption or retirement of the Notes will generally be treated as long-term capital gain or loss to the extent the United States holder has held the Notes for more than one year.  Long-term capital gain of individual taxpayers may be eligible for reduced rates of taxation.  The deductibility of capital loss is subject to significant limitations.

 

            Information with Respect to Foreign Financial Assets. Owners of "specified foreign financial assets" with an aggregate value in excess of U.S.$50,000 (and in some circumstances, a higher threshold) may be required to file an information report with respect to such assets with their tax returns.  "Specified foreign financial assets" may include financial accounts maintained by foreign financial institutions, as well as the following, but only if they are held for investment and not held in accounts maintained by financial institutions:  (i) stocks and securities issued by non-United States persons, (ii) financial instruments and contracts that have non-United States issuers or counterparties, and (iii) interests in foreign entities.  Holders are urged to consult their tax advisors regarding the application of this reporting requirement to their ownership of the Notes.

 

            Medicare Tax. A United States holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax (the "Medicare tax") on the lesser of (1) the United States holder's "net investment income" (or "undistributed net investment income" in the case of an estate or trust) for the relevant taxable year and (2) the excess of the United States holder's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between U.S.$125,000 and U.S.$250,000, depending on the individual's circumstances). A holder's net investment income will generally include its interest income and its net gains from the disposition of Notes, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). United States holders that are individuals, estates or trusts are urged to consult their tax advisors regarding the applicability of the Medicare tax to their income and gains in respect of their investment in the Notes.

 

 

INTER-AMERICAN DEVELOPMENT BANK

By:                                                                                           

Name:    Gustavo Alberto De Rosa 

Title:      Chief Financial Officer and
General Manager, Finance Department

 


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