Company Announcements

Issue of Debt

Source: RNS
RNS Number : 8284J
Inter-American Development Bank
26 August 2021
 

 

 

PRICING SUPPLEMENT

Inter-American Development Bank

Global Debt Program

Series No: 729

Tranche No.: 4

 

 

GBP 140,000,000 0.500 percent Notes due September 15, 2026 (the "Notes") as from August 25, 2021 to be consolidated and form a single series with the Bank's GBP 275,000,000 0.500 percent Notes due September 15, 2026, issued on October 22, 2019 (the "Series 729 Tranche 1 Notes"), the Bank's GBP 250,000,000 0.500 percent Notes due September 15, 2026, issued on June 25, 2020 (the "Series 729 Tranche 2 Notes") and the Bank's GBP 135,000,000 0.500 percent Notes due September 15, 2026, issued on July 16, 2021 (the "Series 729 Tranche 3 Notes")

 

 

 

Issue Price: 99.737 percent plus 344 days' accrued interest

 

 

 

 

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

 

 

 

Barclays

HSBC

 

 

The date of this Pricing Supplement is August 20, 2021.

 

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 ("UK") Financial Services and Markets Act 2000 or a base prospectus for the purposes of Regulation (EU) 2017/1129  (as amended, the "Prospectus Regulation") or the Prospectus Regulation as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA")).  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.

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

 

1.

(a) Series No.:

729

 

(b) Tranche No.:

4

2.

Aggregate Principal Amount:

GBP 140,000,000

As from the Issue Date, the Notes will be consolidated and form a single series with the Series 729 Tranche 1 Notes, the Series 729 Tranche 2 Notes and the Series 729 Tranche 3 Notes.

3.

Issue Price:

GBP 140,291,526, which amount represents the sum of (a) 99.737 percent of the Aggregate Principal Amount plus (b) the amount of GBP 659,726 representing 344 days' accrued interest, inclusive.

4.

Issue Date:

August 25, 2021

5.

Form of Notes
(Condition 1(a)):


Registered only, as further provided in paragraph 9(c) of "Other Relevant Terms" below.
 

6.

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

 

GBP 1,000 and integral multiples thereof

7.

Specified Currency
(Condition 1(d)):


Pound sterling ("GBP") being the lawful currency of the United Kingdom of Great Britain and Northern Ireland

8.

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



GBP

9.

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


GBP

10.

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


September 15, 2026

11.

Interest Basis
(Condition 5):


Fixed Interest Rate (Condition 5(I))

12.

Interest Commencement Date
(Condition 5(III)):


September 15, 2020

13.

Fixed Interest Rate (Condition 5(I)):

(a)  Interest Rate:



0.500 percent per annum

 

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

 

Annually in arrear on September 15 in each year, commencing on September 15, 2021, up to and including the Maturity Date.

 

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):

 

Actual/Actual (ICMA)

 

14.

Relevant Financial Center:

London and New York

15.

Relevant Business Days:

London and New York

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:

Each of the Managers represents and agrees that (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Bank, and (b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to such Notes in, from or otherwise involving the UK.

 

 

(c)  Singapore:

In the case of the Notes being offered into Singapore in a primary or subsequent distribution, and solely for the purposes of its obligations pursuant to Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the "SFA"), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A of the SFA) that the Notes are "prescribed capital markets products" (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

 

 

(d) 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, each of the Managers 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.

20.

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")."

21.

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".

 

 

If applicable and so appointed, and unless

otherwise defined herein, the "Calculation

Agent" referred to in amended Condition

7(h) shall be the Global Agent under the

Bank's Global Debt Program - namely,

Citibank, N.A., London Branch, or its duly authorized successor.

 

 

Other Relevant Terms

 

1.

Listing:

Application has been made for the Notes to be admitted to the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange plc's UK 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:

 

 

 

 

Euroclear Bank SA/NV and Clearstream Banking S.A.

 

3.

Syndicated:

Yes

4.

If Syndicated:

 

 

(a)  Liability:

Several and not joint

 

(b)  Managers:

Barclays Bank PLC

HSBC Bank plc

 

5.

Commissions and Concessions:

No commissions or concessions are payable in respect of the Notes.

6.

Estimated Total Expenses:

The Managers have agreed to pay for all material expenses related to the issuance of the Notes, except the Issuer will pay for the London Stock Exchange listing fees, if applicable.

7.

Codes:

 

 

(a)  Common Code:

206572817

 

(b)  ISIN:

XS2065728177

8.

Identity of Managers:

Barclays Bank PLC

HSBC Bank plc

 

9.

Provisions for Registered Notes:

 

 

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


 

No

 

(b)  DTC Global Note(s):

No

 

(c)  Other Registered Global Notes:

 

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.

 

 

General Information

Additional Information Regarding the Notes

1.         The language set out under the heading "Use of Proceeds" in the Prospectus shall be deleted in its entirety and replaced by the following:

            "The net proceeds from the sale of the Notes will be included in the ordinary capital resources of the Bank and, will not be committed or earmarked for lending to, or financing of, any specific loans, projects or programs.  The Bank, in partnership with its member countries, works to reduce poverty and inequalities in Latin America and the Caribbean by promoting economic and social development in a sustainable, climate friendly way.

            The Bank's strategic priorities include social inclusion and equality, productivity and innovation and economic integration along with three cross-cutting issues: gender equality and diversity, climate change and environmental sustainability, and institutional capacity and the rule of law.  Each strategic priority of the Bank aligns to at least one of the United Nations Sustainable Development Goals ("SDGs"), with all goals covered within the Bank's institutional strategy, which may be adapted from time to time should the United Nations SDGs definition evolve.

            All projects undertaken by the Bank go through the Bank's rigorous sustainability framework. The framework tracks measurable results, adherence to lending targets and the effectiveness of its environmental and social safeguards. The Bank's administrative and operating expenses are currently covered entirely by the Bank's various sources of revenue, consisting primarily of net interest margin and investment income (as more fully described in the Bank's Information Statement)."

2.         Matters relating to UK MiFIR

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

 

            UK MiFIR product governance / Retail investors, professional investors and ECPs target market - Solely for the purposes of the UK 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 retail clients, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of UK domestic law by virtue of the EUWA, eligible counterparties, as defined in COBS, and professional clients, as defined in UK MiFIR; 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 UK manufacturer's target market assessment; however, a distributor subject to the UK MiFIR Product Governance Rules is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the UK manufacturer's target market assessment) and determining appropriate distribution channels.

 

            For the purposes of this provision, (i) the expression "UK manufacturer" means the Dealer, (ii) the expression "COBS" means the FCA Handbook Conduct of Business Sourcebook, (iii) the expression "UK MiFIR" means Regulation (EU) No 600/2014 as it forms part of UK domestic law by virtue of the EUWA, and (iv) the expression "UK MiFIR Product Governance Rules" means the FCA Handbook Product Intervention and Product Governance Sourcebook.

3.         United States Federal Income Tax Matters

            The following supplements the discussion under the "Tax Matters" section of the Prospectus regarding the United States 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 United States federal, state, and local tax laws and non-United States tax laws and possible changes in tax laws.

 

Because the Notes are denominated and payable in British pound sterling, a United States holder of the Notes will generally be subject to special United States federal income tax rules governing foreign currency transactions, as described in the Prospectus in the last four paragraphs of "-Payments of Interest" , in "-Purchase, Sale and Retirement of the Notes" and in "-Exchange of Amounts in Other Than U.S. Dollars" under the "United States Holders" section.

 

            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 344 days of accrued interest that a United States holder paid as part of the Issue Price of the Notes ("Pre-Issuance Accrued Interest") will not be treated as an interest payment for United States federal income tax purposes, and will accordingly only be taxable to the extent that the U.S. dollar value of the amount received in respect of such Pre-Issuance Accrued Interest differs from the U.S. dollar amount paid by the holder in respect of such interest.  Any such difference should give rise to United States foreign currency gain or loss.

 

            Upon a sale or retirement of the Notes, a United States holder will generally recognize gain or loss equal to the difference, if any, between (i) the U.S. dollar value of the amount realized on the sale or retirement (other than amounts attributable to accrued but unpaid interest, which would be treated as interest payments except to the extent that such amounts are a return of Pre-Issuance Accrued Interest), and (ii) the United States holder's adjusted tax basis in the Notes.  A United States holder's adjusted tax basis in the Notes generally will equal the U.S. dollar cost of the Notes to the United States holder, reduced, if such disposition occurs after the first interest payment, by an amount equal to the U.S. dollar value on the issue date of the Pre-Issuance Accrued Interest that was previously received by the United States holder.  Such gain or loss will be capital gain or loss except to the extent attributable to changes in exchange rates.  Capital gain of individual taxpayers from the sale or retirement of Notes held for more than one year may be eligible for reduced rates of taxation.  The deductibility of a 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 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 generally includes its interest income, foreign currency gain and its net capital gains from the disposition of Notes, unless such interest income or  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.

 

            Treasury Regulations Requiring Disclosure of Reportable Transactions.  Treasury regulations require United States taxpayers to report certain transactions that give rise to a loss in excess of certain thresholds (a "Reportable Transaction").  Under these regulations, because the Notes are denominated in a foreign currency, a United States holder (or a non-United States holder that holds the Notes in connection with a United States trade or business) that recognizes a loss with respect to the Notes that is characterized as an ordinary loss due to changes in currency exchange rates (under any of the rules discussed under the "Tax Matters" section of the Prospectus) would be required to report the loss on IRS Form 8886 (Reportable Transaction Statement) if the loss exceeds the thresholds set forth in the regulations.  For individuals and trusts, this loss threshold is U.S.$50,000 in any single taxable year.  For other types of taxpayers and other types of losses, the thresholds are higher.  Holders should consult with their tax advisors regarding any tax filing and reporting obligations that may apply in connection with acquiring, owning and disposing of Notes.

 

 

INTER-AMERICAN DEVELOPMENT BANK

 

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