Company Announcements

Issue of Debt

Source: RNS
RNS Number : 1197K
Inter-American Development Bank
23 August 2019
 

 

 

PRICING SUPPLEMENT

Inter-American Development Bank

Global Debt Program

Series No.:  721

 

 

 

USD100,000,000 Floating Rate Notes due August 23, 2021 (the "Notes")

Issue Price:  100.00 percent

 

 

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

 

 

 

Wells Fargo Securities, LLC

 

 

The date of this Pricing Supplement is August 20, 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.

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.

 

1. 

Series No.:

721

2.     

Aggregate Principal Amount:

USD100,000,000

3.     

Issue Price:

USD100,000,000 which is 100.00 percent of the Aggregate Principal Amount

4.     

Issue Date:

August 23, 2019

5.     

Form of Notes
(Condition 1(a)):


Registered only, as further provided in paragraph 9 of "Other Relevant Terms" below

6.     

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


USD100,000 and integral multiples of USD10,000 in excess thereof

7.     

Specified Currency
(Condition 1(d)):


United States Dollars (USD) being the lawful currency of the United States of America

8.     

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



USD

9.     

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


USD

10.   

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


August 23, 2021

11.   

Interest Basis
(Condition 5):


Variable Interest Rate (Condition 5(II))

12.   

Interest Commencement Date
(Condition 5(III)):


Issue Date (August 23, 2019)

13.   

Variable Interest Rate (Condition 5(II)):



(a)           Calculation Amount (if different than Principal Amount of the Note):

 

Not Applicable


(b)           Business Day Convention:

Following Business Day Convention


(c)           Specified Interest Period:

Not Applicable


(d)           Interest Payment Date:

Monthly in arrear on the 23rd of each month, commencing on September 23, 2019, up to and including the Maturity Date.

Each Interest Payment Date is subject to adjustment in accordance with the Following Business Day Convention.


(e)           Reference Rate:

1-Month USD-LIBOR-BBA

"1-Month USD-LIBOR-BBA" means the rate for deposits in USD for a period of 1 month which appears on Reuters Screen LIBOR01 (or such other page that may replace that page on that service or a successor service) as of the Relevant Time on the Interest Determination Date;

"Relevant Time" means 11:00 a.m., London time;

"Interest Determination Date" means the second London Banking Day prior to the first day of the relevant Interest Period; and

"London Banking Day" means a day on which commercial banks are open for general business, including dealings in foreign exchange and foreign currency deposits, in London.

If such rate does not appear on Reuters Screen LIBOR01 (or such other page that may replace that page on that service or a successor service) at the Relevant Time on the Interest Determination Date, then the rate for 1-Month USD-LIBOR-BBA shall be determined on the basis of the rates at which deposits in USD are offered at the Relevant Time on the Interest Determination Date by five major banks in the London interbank market (the "Reference Banks") as selected by the Calculation Agent, to prime banks in the London interbank market for a period of 1 month commencing on the first day of the relevant Interest Period and in an amount that is representative for a single transaction in the London interbank market at the Relevant Time.  The Calculation Agent will request the principal London office of each of the Reference Banks to provide a quotation of its rate.

 

If at least two such quotations are provided, the rate for 1-Month USD-LIBOR-BBA shall be the arithmetic mean of such quotations.  If fewer than two quotations are provided as requested, the rate for 1-Month USD-LIBOR-BBA shall be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Calculation Agent, at approximately 11:00 a.m., New York City time, on the first day of the relevant Interest Period for loans in USD to leading European banks for a period of 1 month commencing on the first day of the relevant Interest Period and in an amount that is representative for a single transaction in the London interbank market at such time.

 

If no quotation is available or if the Calculation Agent determines in its sole discretion that there is no suitable bank that is prepared to provide the quotes, the Calculation Agent will determine the rate for 1-Month USD-LIBOR-BBA for the Interest Determination Date in question in a manner that it deems commercially reasonable by reference to such additional resources as it deems appropriate.


(f)            Primary Source for Interest Rate Quotations for Reference Rate:



Reuters


(g)           Calculation Agent:

See "7. Identity of Calculation Agent"
under "Other Relevant Terms
"

14.   

Other Variable Interest Rate Terms (Conditions 5(II) and (III)):



(a)           Spread:

plus (+) 0.13 percent


(b)           Variable Rate Day Count Fraction if not actual/360:

 

Act/360, adjusted


(c)           Relevant Banking Center:

London and New York

15.   

Relevant Financial Center:

London and New York

16.   

Relevant Business Days:

London and New York

17.   

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


No

18.   

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


No

19.   

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

 

In the event the Notes become due and payable as provided in Condition 9 (Default), the Early Redemption Amount with respect to the minimum Authorized Denomination will be USD100,000 plus accrued interest, if any, as determined in accordance with "13. Variable Interest Rate (Condition 5(II)) and "14. Other Variable Interest Rate Terms (Conditions 5(II) and (III)).

20.   

Governing Law:

New York

21.   

Selling Restrictions:

(a)        United States:

 

 

Under the provisions of Section 11(a) of the Inter-American Development Bank Act, the Notes are exempted securities within the meaning of Section 3(a)(2) of the U.S. Securities Act of 1933, as amended, and Section 3(a)(12) of the U.S. Securities Exchange Act of 1934, as amended.


(b)        United Kingdom:

The Dealer 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 Bank that would permit a public offering of the Notes, or possession or distribution of any offering material relating to the Notes in any jurisdiction where action for that purpose is required.  Accordingly, the Dealer agrees that it will observe all applicable provisions of law in each jurisdiction in or from which it may offer or sell Notes or distribute any offering material.

22.

Amendment to Condition 7(a)(i):

Condition 7(a)(i) is hereby amended by deleting the first sentence thereof and replacing it with the following: "Payments of principal and interest in respect of Registered Notes shall be made to the person shown on the Register at the close of business on the business day before the due date for payment thereof (the "Record Date")."

 

23.

Amendment to Condition 7(h):

The following shall apply to Notes any payments in respect of which are payable in a Specified Currency other than United States Dollars:

Condition 7(h) is hereby amended by deleting the words "the noon buying rate in U.S. dollars in the City of New York for cable transfers for such Specified Currency as published by the Federal Reserve Bank of New York on the second Business Day prior to such payment or, if such rate is not available on such second Business Day, on the basis of the rate most recently available prior to such second Business Day" and replacing them with the words "a U.S. dollar/Specified Currency exchange rate determined by the Calculation Agent as of the second Business Day prior to such payment, or, if the Calculation Agent determines that no such exchange rate is available as of such second Business Day, on the basis of the exchange rate most recently available prior to such second Business Day. In making such determinations, the Calculation Agent shall act in good faith and in a commercially reasonable manner having taken into account all available information that it shall deem relevant".

 

Other Relevant Terms


1.  

Listing:

None

2.  

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

 

 

The Depository Trust Company (DTC); Euroclear Bank SA/NV; Clearstream Banking, S.A.

3.  

Syndicated:

No

4.  

Commissions and Concessions:

0.02% of the Aggregate Principal Amount

5.     

Estimated Total Expenses:

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

6.     

Codes:



(a)        ISIN:

US45818WCN48


(b)        CUSIP:

45818WCN4

7.     

Identity of Calculation Agent:

Citibank, N.A., London Branch

8.     

Identity of Dealer:

Wells Fargo Securities, LLC

9.     

Provision for Registered Notes:



(a)        Individual Definitive Registered Notes Available on Issue Date:

 

No


(b)        DTC Global Note(s):

Yes, issued in accordance with the Global Agency Agreement, dated January 8, 2001, as amended, among the Bank, Citibank, N.A. as Global Agent, and the other parties thereto.


(c)        Other Registered Global Notes:

No

 

General Information

Additional Information Regarding the Notes

1.         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.

The Notes should be treated as variable rate debt instruments that are issued without original issue discount. 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.  Upon the sale or maturity of the Notes, a United States holder should generally recognize gain or loss equal to the difference 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.  Such gain or loss generally should be capital gain or loss and should 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.

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."

Information with Respect to Foreign Financial Assets. Owners of "specified foreign financial assets" with an aggregate value in excess of USD50,000 (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 USD125,000 and USD250,000, 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:     F. Ramon Ruiz Garcia
Title:        Division Chief, Treasury - Treasurer


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