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Inter 2042 | LSE:42BI | London | Medium Term Loan |
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TIDM42BI
RNS Number : 4269O
Inter-American Development Bank
29 May 2020
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No.: 749
AUD 350,000,000 1.30 percent Notes due May 29, 2030 (the "Notes")
Issue Price: 100.00 percent
No application has been made to list the Notes on any stock exchange.
Wells Fargo Securities
The date of this Pricing Supplement is May 21, 2020
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 Regulation (EU) 2017/1129). 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.
1. Series No.: 749 2. Aggregate Principal Amount: AUD 350,000,000 3. Issue Price: AUD 350,000,000 , which is 100.00 percent of the Aggregate Principal Amount. 4. Issue Date: May 29, 2020 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)): AUD 1,000,000 and integral multiples thereof 7. Specified Currency (Condition 1(d)): Australian Dollars (AUD) being the lawful currency of the Commonwealth of Australia. 8. Specified Principal Payment Currency (Conditions 1(d) and 7(h)): AUD 9. Specified Interest Payment Currency AUD (Conditions 1(d) and 7(h)): 10. Maturity Date (Condition 6(a); Fixed May 29, 2030 Interest Rate): The Maturity Date is subject to adjustment in accordance with the Modified Following Business Day Convention with no adjustment to the amount of interest otherwise calculated. 11. Interest Basis (Condition 5): Fixed Interest Rate (Condition 5(I)) 12. Interest Commencement Date (Condition 5(III)): Issue Date (May 29, 2020) 13. Fixed Interest Rate (Condition Condition 5(I), as amended and 5(I)): supplemented below, shall apply to the Notes. The bases of the Calculation of the Interest Amount, Interest Payment Dates and default interest are as set out below. (a) Interest Rate: 1.30 percent per annum (b) Business Day Convention: Modified Following Business Day Convention (c) Fixed Rate Interest Semi-annually on each May 29 and Payment Date(s): November 29, commencing on November 29, 2020 and ending on, and including, the Maturity Date. Each Interest Payment Date is subject to adjustment in accordance with the Modified Following Business Day Convention with no adjustment to the amount of interest otherwise calculated. (d) Fixed Rate Day Count Fraction(s): 30/360 14. Relevant Financial Center: New York, London and Sydney 15. Relevant Business Days: New York, London and Sydney 16. Issuer's Optional Redemption (Condition 6(e)): No 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 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) Commonwealth of Australia The Dealer is neither a bank nor an authorized deposit-taking institution which is authorized under the Banking Act 1959 of Australia. The Dealer is engaged in connection with the issuance of the Notes solely for the purposes of transactions outside Australia and with persons who are not resident or located in Australia. The Dealer represents and agrees that it: * has not (directly or indirectly) offered or invited applications, and will not offer or invite applications, for the issue, sale or purchase of the Notes in Australia (including an offer or invitation which is received by a person in Australia); and * has not distributed or published, and will not distribute or publish, the Prospectus or any other offering material or advertisement (including any Pricing Supplement) relating to the Notes in Australia.
The Dealer has not provided, and will not provide, any financial services (as defined in the Corporations Act 2001 of Australia ("Corporations Act")) in, or into, Australia in connection with the issuance of the Notes and it has not engaged, and will not engage, in any conduct intended to induce persons who are resident or located in Australia to use the financial services the Dealer provides. The Dealer acknowledges in relation to the Global Debt Program and the issue of the Notes that the Prospectus has not been, and will not be, and no other prospectus or other disclosure document (as defined in the Corporations Act) in relation to the Global Debt Program or any Notes has been or will be, lodged with the Australian Securities and Investments Commission or any other Australian governmental agency . (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. 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". 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: None. 2. Details of Clearance System Approved by the Bank and the Euroclear Bank SA/NV and 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. 6. Codes: (a) Common Code: 217807352 (b) ISIN: XS2178073529 7. Identity of Dealer: Wells Fargo Securities, LLC 8. Provisions for Registered Notes: (a) Individual Definitive No Registered Notes Available on Issue Date: (b) DTC Global Note(s): No (c) Other Registered Global Yes, issued in accordance with Notes: 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. 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. 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)."
3. U nited 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.
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.
Because the Notes are denominated in AUD, 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.
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 the receipt of 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 value of the cost of the Notes to 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 the 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."
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 U.S. 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 above or 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.
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 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.
INTER-AMERICAN DEVELOPMENT BANK
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.
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May 29, 2020 11:29 ET (15:29 GMT)
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