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TIDM42BI
RNS Number : 4223C
Inter-American Development Bank
28 September 2018
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No.: 675
US$ 100,000,000 Callable Step-Rate Notes due September 26, 2048
Issue Price: 100.00 percent
Application has been made for the Notes to be admitted to the Panama Stock Exchange
Citigroup
The date of this Pricing Supplement is September 21, 2018.
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 / 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.
1. Series No.: 675 2. Aggregate Principal Amount: US$ 100,000,000 3. Issue Price: US$ 100,000,000, which is 100.00 percent of the Aggregate Principal Amount. 4. Issue Date: September 26, 2018 5. Form of Notes (Condition 1(a)): Registered only, as further provided in paragraph 8(c) of "Other Relevant Terms" below. 6. Authorized Denomination(s) (Condition 1(b)): US$ 200,000 7. Specified Currency (Condition 1(d)): United States Dollars ("US$") being the lawful currency of the United States of America 8. Specified Principal Payment Currency (Conditions 1(d) and 7(h)): US$ 9. Specified Interest Payment Currency US$ (Conditions 1(d) and 7(h)): 10. Maturity Date (Condition 6(a); Fixed September 26, 2048 Interest Rate): 11. Interest Basis (Condition 5): Fixed Interest Rate (Condition 5(I)) 12. Interest Commencement Date (Condition 5(III)): Issue Date (September 26, 2018) 13. Fixed Interest Rate (Condition 5(I)): (a) Interest Rate: From and including the Issue Date to but excluding September 26, 2024: 3.25 percent per annum From and including September 26, 2024 to but excluding September 26, 2030: 3.50 percent per annum From and including September 26, 2030 to but excluding September 26, 2036: 3.75 percent per annum From and including September 26, 2036 to but excluding September 26, 2042: 4.00 percent per annum From and including September 26, 2042 to but excluding September 26, 2048: 4.25 percent per annum (b) Fixed Rate Interest Payment Date(s): Semi-Annually in arrears on March 26 and September 26 in each year, commencing on March 26, 2019 and ending on 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): 30/360 14. Relevant Financial Center: New York 15. Relevant Business Day: New York, London and Panama City 16. Issuer's Optional Redemption (Condition 6(e)): Yes, in whole but not in part (a) Notice Period: No less than five (5) Relevant Business Days prior to the Optional Redemption Date (b) Amount: 100.00 percent per Authorized Denomination (c) Date(s): Each Interest Payment Date scheduled to fall on March 26 and September 26 in each year, commencing on September 26, 2021 to and including March 26, 2048 (d) Early Redemption Amount Bank: 100.00 percent of the Aggregate Principal Amount 17. Redemption at the Option of the Noteholders (Condition No 6(f)): 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 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) Panama: The notes have not been and will not be registered with the Superintendence of Capital Markets in reliance on the exemption from registration set forth in Article 129(1)(b) of Decree Law 1 of July 8, 1999, as amended to date. (d) 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. 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: Panama Stock Exchange 2. Details of Clearance System Approved by the Bank and the Global Agent and Clearance and Euroclear Bank SA/NV and Clearstream, Settlement Procedures: Luxembourg 3. Syndicated: No 4. Commissions and Concessions: No commissions or concessions are payable in respect of the Notes. 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: US45818WBZ86 (b) CUSIP: 45818WBZ8 7. Identity of Dealer: Citigroup Global Markets Inc. 8. Provisions for Registered Notes: (a) Individual Definitive Registered Notes Available No on Issue Date: (b) DTC Global Note(s): No (c) Other Registered Global Yes, issued in accordance with the Notes: 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. 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 / 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. Credit Rating of the Notes:
The Notes will be rated Investment Grade by a credit rating agency authorized by the Superintendencia del Mercado de Valores de Panamá.
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.
The Notes should not be treated as issued with original issue discount ("OID") despite the fact that the interest rate on the Notes is scheduled to step-up over the term of the Notes because Treasury regulations generally deem an issuer to exercise a call option in a manner that minimizes the yield on the debt instrument for purposes of determining whether a debt instrument is issued with OID. The yield on the Notes would be minimized if the Bank calls the Notes immediately before the increase in the interest rate on September 26, 2024, and therefore the Notes should be treated for OID purposes as fixed-rate notes that will mature prior to the step-up in interest rate for the Notes. This assumption is made solely for U.S. federal income tax purposes of determining whether the Notes are issued with OID and is not an indication of the Bank's intention to call or not to call the Notes at any time. If the Bank does not call the Notes prior to the first increase in the interest rate then, solely for OID purposes, the Notes will be deemed to be reissued at their adjusted issue price at such time. This deemed issuance should not give rise to taxable gain or loss to United States holders. The same analysis would apply to each subsequent increase in the interest rate and therefore the Notes should
never be treated as issued with OID for U.S. federal income tax purposes. Under this approach the coupon on a Note will generally be taxable to a United States holder as ordinary interest income at the time it accrues or is received in accordance with the United States holder's normal method of accounting for tax purposes (regardless of whether the Bank calls the Notes).
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 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
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IODUWSNRWRAKUAR
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September 28, 2018 12:42 ET (16:42 GMT)
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