TIDM42BI
RNS Number : 1436N
Inter-American Development Bank
28 September 2021
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No.: 810
BRL 58,800,000 9.65 percent Notes due September 29, 2031 (the
"Notes")
Payable in United States Dollars
Issue Price: 100 percent
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
Citigroup
The date of this Pricing Supplement is September 22, 2021
The Notes will be treated as issued with original issue discount
and are not intended for sale or resale to U.S. persons.
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 July 28, 2020 (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. Together with the applicable Conditions
(as defined above), which are expressly incorporated hereto, these
are the only terms that form part of the form of Notes for such
issue.
1. Series No.: 810
2. Aggregate Principal Amount: BRL 58,800,000
3. Issue Price: BRL 58,800,000, which is 100 percent
of the Aggregate Principal Amount
The Issue Price will be payable
in USD in the amount of USD 11,242,829.83
at the agreed rate of BRL 5.23
per one USD .
4. Issue Date: September 27, 2021
5. Form of Notes
(Condition 1(a)): Registered only
6. New Global Note: No
7. Authorized Denomination(s)
(Condition 1(b)): BRL 5,000
8. Specified Currency
(Condition 1(d)): Brazilian Real ("BRL"), the lawful
currency of the Federative Republic
of Brazil, provided that all payments
in respect of the Notes will be
made in United States Dollars ("USD")
9. Specified Principal Payment
Currency
(Conditions 1(d) and 7(h)): USD
10. Specified Interest Payment
Currency USD
(Conditions 1(d) and 7(h)):
11. Maturity Date
(Condition 6(a); Fixed
Interest Rate and Zero Coupon): September 29, 2031
The Maturity Date is subject to
the Business Day Convention with
no adjustment to the amount of
interest otherwise calculated.
Further, the date of payment in
respect of the Maturity Date is
subject to postponement if any
of the Applicable Disruption Fallbacks
apply, with no adjustment to the
amount of interest otherwise calculated.
12. Interest Basis
(Condition 5): Fixed Interest Rate (Condition
5(I))
13. Interest Commencement Date
(Condition 5(III)) : Issue Date (September 27, 2021)
14. Fixed Interest Rate (Condition
5(I)):
(a) Interest Rate: 9.65 percent per annum
(b) Fixed Rate Interest
Payment Date(s): Annually on September 29 in each
year, commencing with a long first
coupon on September 29, 2022, up
to and including the Maturity Date.
Each Fixed Rate Interest Payment
Date is subject to the Business
Day Convention with no adjustment
to the amount of interest otherwise
calculated. Further, the date of
payment in respect of each Fixed
Rate Interest Payment Date is subject
to postponement if any of the Applicable
Disruption Fallbacks apply, with
no adjustment to the amount of
interest otherwise calculated.
Calculation of Interest Amount
:
For the purposes of the calculation
of the Interest Amount payable
for any Interest Period, there
shall be no adjustment pursuant
to the Business Day Convention.
As soon as practicable and in accordance
with the procedure specified herein,
the Calculation Agent will determine
the Reference Rate (as defined
below) and calculate the Interest
Amount with respect to each minimum
Authorized Denomination for the
relevant Interest Period.
The Interest Amount with respect
to the Interest Period from and
including the Interest Commencement
Date to but excluding September
29, 2022 shall be a USD amount
calculated using the Reference
Rate determined as of the relevant
Rate Fixing Date (as defined below)
as follows:
BRL 485.14 per minimum Authorized
Denomination
divided by
the Reference Rate
(and rounding, if necessary, the
entire resulting figure to the
nearest two decimal places, with
USD 0.005 being rounded upwards).
The Interest Amount with respect
to each subsequent Interest Period
shall be a USD amount calculated
using the Reference Rate determined
as of the relevant Rate Fixing
Date as follows:
BRL 482.50 per minimum Authorized
Denomination
divided by
the Reference Rate
(and rounding, if necessary, the
entire resulting figure to the
nearest two decimal places, with
USD 0.005 being rounded upwards).
"Brazil Business Day" means a day
(other than a Saturday or a Sunday)
on which banks and foreign exchange
markets are open for business in
Rio de Janeiro, Brasilia and São
Paulo.
"PTAX Rate" means, in respect of
a Rate Fixing Date, the closing
BRL/USD offered rate for USD, expressed
as the number of BRL per one USD,
as reported by Banco Central do
Brasil on its website ( www.bcb
.gov.br; see "Cotações
e boletins"), or any succeeding
rate source, by approximately 1:15
p.m. São Paulo time on such
Rate Fixing Date and as published
on Reuters Screen "BRLUSDPTAX=
CBBR" Page (or such other page
or services as may replace that
page to be used for the purpose
of obtaining the reference rate),
provided that in the event of any
inconsistency between such rate
on Banco Central do Brasil's website
and such rate on Reuters Screen
"BRLUSDPTAX= CBBR" Page, the closing
BRL/USD offered rate published
on Banco Central do Brasil's website
shall prevail.
"Rate Fixing Date" for any Interest
Payment Date or the Maturity Date
or date on which an amount is payable
means the fifth Valuation Business
Day prior to such date.
"Reference Rate" means, in respect
of a Rate Fixing Date:
(a) the PTAX Rate; or
(b) in the event that the PTAX
Rate is not available or an Exchange
Rate Divergence has occurred on
the relevant Rate Fixing Date,
the Calculation Agent shall determine
that a "Price Source Disruption"
has occurred, and shall promptly
inform the Bank, the Noteholders
and the Global Agent of such occurrence.
For the purposes of obtaining a
Reference Rate, the Applicable
Disruption Fallbacks will apply.
"Valuation Business Day" means
a day on which commercial banks
are open for general business (including
dealing in foreign exchange and
foreign currency deposits) in Rio
de Janeiro, Brasilia, São
Paulo and New York.
Applicable Disruption Fallbacks
(in order of application) :
1. Valuation Postponement. For
purposes of obtaining a Reference
Rate, the Reference Rate will be
determined on the Valuation Business
Day first succeeding the day on
which the Price Source Disruption
ceases to exist, unless the Price
Source Disruption continues to
exist (measured from the date,
that, but for the occurrence of
the Price Source Disruption, would
have been the Rate Fixing Date)
for a consecutive number of calendar
days equal to the Maximum Days
of Postponement. In such event,
the Reference Rate will be determined
on the next Valuation Business
Day after the Maximum Days of Postponement
in accordance with the next Applicable
Disruption Fallback.
2. Calculation Agent Determination
of the Reference Rate. For purposes
of obtaining a Reference Rate,
the Calculation Agent will determine
the Reference Rate (or a method
for determining the Reference Rate)
in its sole discretion, acting
in good faith and in a commercially
reasonable manner.
Notwithstanding anything herein
to the contrary, in no event shall
the total number of consecutive
calendar days during which either
(i) valuation is deferred due to
an Unscheduled Holiday, or (ii)
a Valuation Postponement shall
occur (or any combination of (i)
and (ii)), exceed 30 consecutive
calendar days in the aggregate.
Accordingly, (x) if, upon the lapse
of any such 30 day period, an Unscheduled
Holiday shall have occurred or
be continuing on the day following
such period, then such day shall
be deemed to be a Rate Fixing Date,
and (y) if, upon the lapse of any
such 30 day period, a Price Source
Disruption shall have occurred
or be continuing on the day following
such period, then the Valuation
Postponement shall not apply and
the Reference Rate shall be determined
in accordance with the next Applicable
Disruption Fallback (i.e., Calculation
Agent Determination of the Reference
Rate).
"EMTA BRL Exchange Rate Divergence
Procedures" means the EMTA BRL
Exchange Rate Divergence Procedures
published by EMTA on January 22,
2018 (as amended from time to time).
"EMTA BRL Report Event" means that
EMTA (EMTA, Inc., formerly the
Emerging Markets Trading Association,
Inc.) has provided notice to the
EMTA membership, that, in the reasonable
and independent judgement, as notified
to EMTA in accordance with the
EMTA BRL Exchange Rate Divergence
Procedures, of not less than 7
unaffiliated EMTA members that
are recognized market makers active
in the BRL/USD foreign exchange
market (no less than 4 of which
shall be active participants in
the onshore BRL/USD spot market),
the PTAX Rate (following a split
of the exchange rates in Brazil
or otherwise) no longer reflects
the then-prevailing BRL/USD spot
rate for standard-size wholesale
financial transactions involving
the exchange of BRL for USD delivered
outside of Brazil.
"Exchange Rate Divergence" means
that an EMTA BRL Report Event has
occurred with respect to the PTAX
Rate.
"Maximum Days of Postponement"
means 30 calendar days.
"Unscheduled Holiday" means a day
that is not a Valuation Business
Day and the market was not aware
of such fact (by means of a public
announcement or by reference to
other publicly available information)
until a time later than 9:00 a.m.
local time in São Paulo two
Valuation Business Days prior to
the relevant Rate Fixing Date.
(c) Business Day Convention: Following Business Day Convention
(d) Fixed Rate Day Count
Fraction(s): Actual/Actual (ICMA)
(e) Calculation Agent: Citibank, N.A., New York
15. Relevant Financial Center: Rio de Janeiro, Brasilia, São
Paulo, London and New York
16. Relevant Business Days: Rio de Janeiro, Brasilia, São
Paulo, London and New York
17. Redemption Amount (Condition
6(a)): The Redemption Amount with respect
to each minimum Authorized Denomination
will be a USD amount calculated
by the Calculation Agent as of
the Rate Fixing Date with respect
to the Maturity Date as follows:
minimum Authorized Denomination
divided by
the Reference Rate
( and rounding, if necessary, the
entire resulting figure to the
nearest 2 decimal places, with
USD 0.005 being rounded upwards
).
Payment of the Redemption Amount
will occur on the Maturity Date,
as may be postponed pursuant to
paragraph 11 above.
18. Issuer's Optional Redemption
(Condition 6I): No
19. Redemption at the Option
of the Noteholders (Condition No
6(f)):
20. Early Redemption Amount
(including accrued interest,
if applicable) (Condition In the event the Notes become due
9): and payable as provided in Condition
9 (Default), the Early Redemption
Amount with respect to each minimum
Authorized Denomination will be
a USD amount equal to the Redemption
Amount that is determined in accordance
with "17. Redemption Amount (Condition
6(a))" plus accrued and unpaid
interest, if any, as determined
in accordance with "14. Fixed Interest
Rate (Condition 5(I))"; provided,
that for purposes of such determination,
the "Rate Fixing Date" shall be
the date that is five (5) Valuation
Business Days prior to the date
upon which the Notes become due
and payable as provided in Condition
9 (Default) .
21. Governing Law: New York
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 Euroclear Bank SA/NV and/or Clearstream
Global Agent and Clearance Banking, S.A.
and
Settlement Procedures:
3. Syndicated: No
4. Commissions and Concessions: No commissions or concessions are
payable in respect of the Notes.
An affiliate of the Dealer has
arranged a swap with the Bank in
connection with this transaction
and will receive amounts thereunder
that may comprise compensation.
5. Estimated Total Expenses: None. The Dealer has agreed to
pay for all material expenses related
to the issuance of the Notes, except
the Bank will pay for the London
Stock Exchange listing fees.
6. Codes:
(a) Common Code: 238820413
(b) ISIN: XS2388204138
7. Identity of Dealer: Citigroup Global Markets Limited
8. Provision 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 Amended and Restated Global
Agency Agreement, dated as of July
28, 2020, between the Bank, Citibank,
N.A., London Branch as Global Agent,
and the other parties thereto.
9. Intended to be held in a
manner which would allow
Eurosystem eligibility: Not Applicable
10. 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.
The Dealer acknowledges that one
or more tranches of Notes of this
series may be originally issued
at an issue price that constitutes
original issue discount (OID) in
excess of "de minimis" OID within
the meaning of applicable United
States tax regulations, and that
the Bank does not intend for any
Notes of this series to be distributed
in the United States or to come
into the hands of U.S. persons.
Accordingly, the Dealer agrees
not to offer or sell any Notes
of this series in the United States
or to U.S. persons.
(b) United Kingdom: The Dealer 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) Brazil: The Dealer has represented and
agreed that it has not offered
or sold and will not offer or sell
any Notes in Brazil. The Notes
have not been and will not be registered
with the Brazilian Securities and
Exchange Commission (Comissão
de Valores Mobiliários, the
"CVM").
(d) 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 Bank 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).
(e) 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.
General Information
Additional Information Regarding the Notes
1. 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.
2. Additional Investment Considerations:
There are significant risks associated with the Notes, including
but not limited to exchange rate risk, price risk and liquidity
risk. Investors should consult their own financial, legal,
accounting and tax advisors about the risks associated with an
investment in these Notes, the appropriate tools to analyze that
investment, and the suitability of the investment in each
investor's particular circumstances.
Payment of each Interest Amount and the Redemption Amount will
be based on the Reference Rate, which is a measure of the rate of
exchange between the BRL and the USD. Currency exchange rates are
volatile and will affect the holder's return. In addition, the
government of Brazil can from time to time intervene in the foreign
exchange market. These interventions or other governmental actions
could adversely affect the value of the Notes, as well as the yield
(in USD terms) on the Notes and the amount payable at maturity or
upon acceleration. Even in the absence of governmental action
directly affecting currency exchange rates, political or economic
developments in Brazil or elsewhere could lead to significant and
sudden changes in the exchange rate between the BRL and the
USD.
The methodologies for determining the Reference Rate may result
in a Redemption Amount (or Early Redemption Amount, as the case may
be) of the Notes, or an Interest Amount on the Notes, being
significantly less than anticipated or less than what an
alternative methodology for determining the Reference Rate would
yield.
The Bank may hedge its obligations under the Notes by entering
into a swap transaction with an affiliate of the Dealer as swap
counterparty. Assuming no change in market conditions or any other
relevant factors, the price, if any, at which the Dealer or another
purchaser might be willing to purchase Notes in a secondary market
transaction is expected to be lower, and could be substantially
lower, than the original issue price of the Notes. This is due to a
number of factors, including that (i) the potential profit to the
secondary market purchaser of the Notes may be incorporated into
any offered price and (ii) the cost of funding used to value the
Notes in the secondary market is expected to be higher than our
actual cost of funding incurred in connection with the issuance of
the Notes. In addition, the original issue price of the Notes
included, and secondary market prices are likely to exclude, the
projected profit that our swap counterparty or its affiliates may
realize in connection with this swap. Further, as a result of
dealer discounts, mark-ups or other transaction costs, any of which
may be significant, the original issue price may differ from values
determined by pricing models used by our swap counterparty or other
potential purchasers of the Notes in secondary market
transactions.
The Notes offered by this Pricing Supplement are complex
financial instruments and may not be suitable for certain
investors. Investors intending to purchase the Notes should consult
with their tax and financial advisors to ensure that the intended
purchase meets the investment objective before making such
purchase.
3. 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.
Because the initial interest payment date under the Notes is
more than one year after the initial issuance of the Notes, none of
the interest payments on the Notes will be treated as "qualified
stated interest" for tax purposes. Accordingly, the Notes will be
treated as issued with original issue discount ("OID") in an amount
equal to the excess of all of the scheduled payments under the
Notes (i.e., the sum of all of the BRL interest and principal
payments under the Notes) over the issue price for the Notes. A
U.S. Holder would then be required to accrue OID on the Notes, and
recognize foreign currency gain or loss upon an interest payment
under the Notes, in the manner described in the Prospectus under
"Tax Matters - United States Holders - Original Issue Discount -
General" and "Tax Matters - United States Holders - Original Issue
Discount - Foreign Currency Discount Notes". Subject to the rules
discussed therein, the primary consequence of the Notes being
issued with OID is that all United States holders (including United
States holders that are subject to the cash basis method of
accounting for tax purposes) will be required to accrue interest on
the Notes in ordinary income and will recognize foreign currency or
gain or loss to the extent of the difference of each USD interest
payments on the Notes and the USD amount that it accrued with
respect to the corresponding OID accruals on the Note. United
States holders are urged to consult their tax advisors regarding
the tax treatment of the Notes, and in particular the tax
consequences arising from the fact that the Notes will be treated
as issued with OID for tax purposes.
INTER-AMERICAN DEVELOPMENT BANK
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END
IODUWAARAVUKURR
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