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Name | Symbol | Market | Type |
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Inter 2042 | LSE:42BI | London | Medium Term Loan |
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TIDM42BI
RNS Number : 6023V
Inter-American Development Bank
10 August 2022
EXECUTION VERSION
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No: 838
USD 10,000,000 2.205 percent Notes due July 21, 2024 ("Notes")
Issue Price: 100.00 percent
Application has been made for the Notes to be admitted
to trading on the Spanish Regulated Mercado de Renta Fija (AIAF)
of the Bolsas y Mercados Españoles
Banco Bilbao Vizcaya Argentaria, S.A.
The date of this Pricing Supplement is July 14, 2022.
THE NOTES ARE NOT AN OBLIGATION OF ANY GOVERNMENT
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") given that the Prospectus Regulation is not applicable to the Inter-American Development Bank pursuant to its article 1.2 b)). 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 a vailable on the basis of the combination of this Pricing Supplement and the Prospectus.
The Notes are issued in accordance with the Amended and Restated Global Agency Agreement (as amended or supplemented from time to time, the "Global Agency Agreement"), dated as of July 28, 2020, between the Inter-American Development Bank (herein called the "Bank") and Citibank, N.A., London Branch as Global Agent (the "Global Agent"), copies of which are on file and available to holders for inspection during normal business hours at the corporate trust office of the Global Agent in London upon reasonable request.
The Noteholder is entitled to the benefit of, and is deemed to have notice of, all the provisions of the Global Agency Agreement applicable to it. The Bank, for value received, hereby promises to pay the Noteholder the Principal Amount or the Redemption Amount in the Specified Currency on the Maturity Date, unless earlier redeemed in accordance with the terms hereof, and to pay interest in arrears from (and including) the Interest Commencement Date on the Calculation Amount at the Interest Rate, in per annum, until the Principal Amount or Redemption Amount, as the case may be, hereof is paid or made available for payment. Interest on this Note shall be payable by the Bank on the dates determined in accordance with the provisions as stated herein.
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. 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.: 838 2. Aggregate Principal Amount: USD 10,000,000 USD 10,000,000, which is 100.00 3. Issue Price: percent of the Aggregate Principal Amount July 21, 2022 4. Issue and Disbursement Date: Iberclear Book-entry Notes only 5. Form of Notes (see paragraph 22(a) Amendment (Condition 1(a)): to Condition 1(a) below). No 6. New Global Note: USD 100,000 7. Authorized Denomination(s) (Condition 1(b)): United States Dollars (USD) being 8. Specified Currency the ( Condition 1(d)): lawful currency of the United States of America 9. Specified Principal Payment USD Currency (Conditions 1(d) and 7(h)): USD 10. Specified Interest Payment Currency (Conditions 1(d) and 7(h)): July 21, 2024 11. Maturity Date (Condition 6(a); Fixed Interest Rate and Zero Coupon): Fixed Interest Rate (Condition 12. Interest Basis 5(I)) (Condition 5): 13. Interest Commencement Date Issue Date (July 21, 2022) (Condition 5(III)): 14. Fixed Interest Rate ( Condition 5(I)): (a) Interest Rate: 2.205 percent per annum (b) Fixed Rate Interest Payment Every two months Date(s): commencing on September 21, 2022 and ending on the Maturity Date. Each Fixed Rate Interest Payment Date is subject to the Business Day Convention, but with no adjustment to the amount of interest otherwise calculated. (c) Business Day Convention: Following Business Day Convention (d) Fixed Rate Day Count Fraction(s): 30/360 (ICMA) 15. Relevant Financial Center: Madrid and New York 16. Relevant Business Day: Madrid and New York. Any relevant "Date" included under this Pricing Supplement in which an action shall be executed, shall be a Relevant Business Day. 17. Relevant Business Day Convention: Following Business Day Convention 18. Issuer's Optional Redemption Yes (Condition 6(e)): (a) Notice Period: Not less than five (5) Business Days prior to the Issuer's Optional Redemption Date (i.e. November 21, 2022) (b) Amount: 10,000,000 (Par) (c) Date: November 21, 2022 19. Redemption at the Option of the Noteholders (Condition No 6(f)): 20. Prescription (not applicable Yes. if governing law is New York) (Condition 8): (a) Principal: Ten (10) years from the respective date on which payment in respect of the Notes becomes due or the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or surrender of
the related certificate) or Coupon being made in accordance with these Conditions, such payment will be made, provided that payment is in fact made upon such presentation or surrender. (b) Interest: Five (5) years from the respective date on which payment in respect of the Notes becomes due or the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or surrender of the related certificate) or Coupon being made in accordance with these Conditions, such payment will be made, provided that payment is in fact made upon such presentation or surrender. 21. Early Redemption Amount In the event the Notes become (including accrued interest, due and payable as provided in if applicable) (Condition 9): 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 "14. Fixed Interest Rate ( Condition 5(I))". 22. Governing Law: Common laws (derecho común) of the Kingdom of Spain 23. Redenomination Provisions/ Additional Provisions Relating to the Notes: (a) Amendment to definition For purposes of this Pricing of "Record Dates" Supplement and the issue of the Notes, the definition of "Record Dates" as included in the Prospectus shall be deleted in its entirety and substituted with the following: "Registered Notes: The close of business on the business day before the due date for payment thereof; provided, however, that for Definitive Registered Notes, and for non-U.S. dollar denominated Registered Global Notes delivered into DTC, the close of business on the fifteenth calendar day before the due date for payment thereof. IBERCLEAR Book-entry Notes: The close of business at the IBERCLEAR Paying Agent on the day preceding the due date for payment thereof. If any such day is not a day on which the IBERCLEAR Paying (b) Amendment to Condition 1(a): Agent is open for business, the Record Date shall be the next day on which the IBERCLEAR Paying Agent is open for business. Bearer Notes: Payments will be as set forth in Condition 7(c)." For purposes of this Pricing Supplement and the issue of the Notes, Condition 1(a) of the Prospectus shall be deleted in its entirety and substituted with the following: "Form: Each issue of Notes of which this Note forms a part is issued as: (i) registered notes ("Registered Notes", other than those issued in exchange for Fed Book-entry Notes (as defined in Condition 1(a)(ii))) in the principal amount specified on such Notes (the "Principal Amount") of an Authorized Denomination (as defined in Condition 1(b)); (ii) uncertificated book-entry notes ("Fed Book-entry Notes") in the Principal Amount of an Authorized Denomination; (iii) bearer notes ("Bearer Notes") in the Principal Amount of an
Authorized Denomination, as specified on such Note; and/or (iv) uncertificated dematerialised book-entry (anotaciones en cuenta) notes ("IBERCLEAR Book-entry Notes"), in accordance with the Spanish Securities Market Act and Royal Decree 878/2015 (Real Decreto 878/2015, de 2 de octubre, sobre compensación, liquidación y registro de valores negociables representados mediante anotaciones en cuenta, sobre el régimen jurídico de los depositarios centrales de valores y de las entidades de contrapartida central y sobre requisitos de transparencia de los emisores de valores admitidos a negociación en un mercado secundario oficial), in the Principal Amount of an Authorized Denomination, and these Conditions shall be read accordingly. Registered Notes and Bearer Notes may, under certain circumstances, be issued in individually certificated form ("Definitive Registered Notes" and "Definitive Bearer Notes", respectively). An issue of Notes may comprise either Registered Notes only, Fed Book-entry Notes only (except as provided in Condition 2(b)), Bearer Notes only, or IBERCLEAR Book-entry Notes only. A certificate will be issued to each holder of Registered Note(s) in respect of its registered holding or holdings. Each Registered Note will be numbered serially with an identifying number which will be recorded in the register (the "Register") which IADB shall cause to be kept by the Registrar. In the case of IBERCLEAR Book-entry Notes, one or more certificates (each, a "Certificate") attesting to the relevant Noteholder's holding of the Notes in the relevant registry will be delivered by the relevant IBERCLEAR member or, where the Noteholder is itself an IBERCLEAR member, by IBERCLEAR (in each case, in accordance with the requirements of Spanish law and the relevant IBERCLEAR member's or, as the case may be, IBERCLEAR's procedures) to such Noteholder upon such Noteholder's request. Bearer Notes bearing interest are issued with Coupons and, where appropriate, Talons attached." (c) Amendment to Condition 1(c): For purposes of this Pricing Supplement and the issue of the Notes, Condition 1(c) of the Prospectus shall be deleted in its entirety and substituted with the following: "Title: (i) Title to Registered Notes shall pass by registration in the Register in accordance with the provisions of the Global Agency Agreement, or otherwise in accordance with applicable law. (ii) IADB may deem and treat the Federal Reserve Bank of New York, in respect of all Fed Book-entry Notes, as the absolute owner thereof for all purposes whatsoever notwithstanding any notice to the contrary and all payments to or on the order of the Federal Reserve Bank of New York, shall be valid and effective to discharge the liability of IADB with respect to such Fed Book-entry Notes, to the extent of the sum or sums
so paid. As custodian of Fed Book-entry Notes, the Federal Reserve Bank of New York may deem and treat other Federal Reserve Banks and Branches and Holding Institutions (as defined below) located in the Second Federal Reserve District holding any Fed Book-entry Notes as the absolute owner thereof for all purposes whatsoever notwithstanding any notice to the contrary; and all payments to or on the order of such Federal Reserve Banks or Branches or Holding Institutions (as defined below), as the case may be, shall be valid and effective to discharge the liability of IADB with respect to such Fed Book-entry Notes to the extent of the sum or sums so paid. A "Holding Institution" is a depositary or other designated institution that has an appropriate book-entry account with a Federal Reserve Bank or Branch. (iii) Title to Bearer Notes, the Coupons appertaining thereto and, where applicable, the Talons appertaining thereto shall pass by delivery. (iv) Title to IBERCLEAR Book-entry Notes and the Coupons appertaining thereto shall pass by registration in the central book-entry register managed by IBERCLEAR and in the detailed book-entry registries maintained by its respective participating entities (entidades participantes) authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notes and in accordance with applicable law. The person shown in the relevant book-entry records shall be considered the holder of the amount of the Notes recorded therein. (v) IADB, the Global Agent, the Fiscal Agent, the Paying Agents, the Registrar and the Transfer Agents shall be entitled to deem and treat the registered holder of any Registered Note or Coupon, or the Federal Reserve Bank of New York for Fed Book-entry Notes, or the bearer of any Bearer Note, Coupon or Talon, to be the absolute owner thereof for the purpose of making payments and for all other purposes, whether or not such Registered Note, Fed Book-entry Note, or Bearer Note, Coupon or Talon is overdue and regardless of any notice of ownership, trust or an interest therein, any writing thereon or any notice of any previous theft or loss thereof (or of the related certificate), and all payments on a Note or Coupon to such holder shall be deemed valid and effectual to discharge the liability of IADB in respect of such Note or Coupon to the extent of the sum or sums so paid. (vi) IADB, the Global Agent, the Paying Agents, the Registrar and the Transfer Agents shall be entitled to deem and treat the registered holder of any IBERCLEAR Book-entry Note or Coupon to be the absolute owner thereof for the purpose of making payments and for all other purposes, whether or not such IBERCLEAR Book-entry Note or Coupon is overdue and regardless of any notice of ownership, trust or an interest therein, any writing thereon or any notice of any previous theft or loss thereof (or of the related certificate), and all payments on a Note or Coupon via the IBERCLEAR Paying Agent to the IBERCLEAR participant authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notesshall be deemed valid and effectual to discharge the liability of IADB in respect of such Note or Coupon to the extent of the sum or sums so paid." (d) Amendment to Condition 2: For purposes of this Pricing Supplement and the issue of the Notes, Condition 2 shall be deleted in its entirety and substituted with the following: "2. Transfers and Exchanges (a) Transfer of Registered Notes
and Exchanges of Registered Notes and Bearer Notes: (i) Subject as provided in Condition 2(f), a Registered Note may be transferred in whole or in part in an Authorized Denomination upon the surrender of the certificate representing such Registered Note to be transferred, together with the form of transfer endorsed on such certificate duly completed and executed, at the specified office of the Registrar or any Transfer Agent. In the case of a transfer of only part of such a Registered Note represented by one certificate, a new certificate shall be issued to the transferee in respect of the part transferred and a further new certificate shall be issued to the transferor in respect of the balance not transferred. Each new certificate to be issued upon transfer of such a Registered Note represented by such certificate will be mailed to such address as may be specified in such form of transfer at the risk of the holder entitled to the new certificate in accordance with the customary procedures of such Registrar or Transfer Agent. (ii) Registered Notes may not be exchanged for Bearer Notes or IBERCLEAR Book-entry Notes. (b) Transfer of Fed Book-entry Notes : Fed Book-entry Notes may be transferred between Holding Institutions, in Federal Reserve Districts where the respective Federal Reserve Banks have adopted appropriate procedures, in accordance with such procedures. Fed Book-entry Notes may not be exchanged for Registered Notes, IBERCLEAR Book-entry Notes or Bearer Notes. (c) Transfer and Exchanges of IBERCLEAR Book-entry Notes : IBERCLEAR Book-entry Notes are issued without any restrictions on their transferability. Consequently, IBERCLEAR Book-entry Notes may be transferred and title to the IBERCLEAR Book-entry Notes may pass (subject to Spanish law and to compliance with all applicable rules, restrictions and requirements of IBERCLEAR or, as the case may be, the relevant IBERCLEAR member) upon registration in the relevant registry of each IBERCLEAR member authorized by IBERCLEAR to hold IBERCLEAR Book-entry and/or IBERCLEAR itself, as applicable. Each Noteholder will be treated as the legitimate owner (titular legítimo) of the relevant IBERCLEAR Book-entry Notes for all purposes (whether or not such Note is overdue and regardless of any notice of ownership, trust or any interest or any writing on, or the theft or loss of, the Certificate issued in respect of it) and no person will be liable for so treating the Noteholder. IBERCLEAR Book-entry Notes may not be exchanged for Registered
Notes, Fed Book-entry Notes or Bearer Notes. (d) Partial Exercise of Options or Partial Redemption in Respect of Registered Notes : In the case of a partial redemption (in respect of an exercise of IADB's or the Noteholder's option or otherwise) of Registered Notes represented by a single certificate, a new certificate in respect of the balance of the interest in any such Registered Notes not redeemed shall be issued to the holder to reflect the exercise of such option. In the case of a partial exercise of an option (other than in respect of optional redemption), one or more new certificates may be issued to the relevant holders reflecting such exercise. New certificates shall only be issued against surrender of the existing certificates to the Registrar or any Transfer Agent. (e) No Exchange of Bearer Notes : Bearer Notes of one Authorized Denomination may not be exchanged for Bearer Notes of another Authorized Denomination. Bearer Notes may not be exchanged for Registered Notes or IBERCLEAR Book-entry Notes. (f) Transfers and Exchanges : Exchanges and registrations of transfer will be effected without charge by or on behalf of IADB or the relevant Agent. However, the transferor or holder requesting an exchange shall bear the expense of the issue and delivery of any Registered Note and shall make any payment (or shall give such indemnity as IADB, the Registrar or the relevant Transfer Agent may require) in respect of any tax or other governmental charges which may be imposed in relation to it. (g) Closed Periods : No transfer of a Registered Note that is not a Definitive Registered Note (as defined in Condition 1(a)) will be effected on the day immediately preceding the due date for any payment of principal, redemption amount or premium (if any) in respect of that Note; and no transfer of a Definitive Registered Note will be effected on any day after the fifteenth calendar day immediately preceding the due date for any such payment. Additionally, no transfer of any Registered Note will be effected (i) during the notice period immediately preceding any date on which Notes may be called for redemption by IADB at its option pursuant to Condition 6(e), (ii) after any such Note has been called for redemption, or (iii) during the period starting on the day immediately preceding any Record Date (as defined in Condition 7(a)) and ending on (and including) such Record Date. (h) Provisions Concerning Transfers : All transfers of Registered Notes and entries on the Register will be made in accordance with the relevant procedures of the Registrar. A copy of the relevant
procedures will be made available during normal business hours by the Registrar to any holder of a Registered Note upon reasonable request." (e) Amendments to Condition For purposes of this Pricing 7: Supplement and the issue of the Notes, a new Condition 7(i) shall be introduced as follows: "(i) IBERCLEAR Book-entry Notes: (a) Payments of Principal and Interest Payments of principal and interest on the Notes will be made by transfer to the account of the relevant IBERCLEAR member holding the Notes for the benefit of the Noteholder according to IBERCLEAR procedures. Following instructions of the Issuer, the Paying Agent shall execute payments of principal and interest on the Notes in accordance with IBERCLEAR procedures. Noteholders must rely on the procedures of IBERCLEAR or, as the case may be, the relevant IBERCLEAR participant authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notes to receive payments under the relevant Notes. Once the IBERCLEAR Paying Agent credits the amounts due to the relevant IBERCLEAR participants, the Issuer will not have any responsibility or liability relating to payments made in respect of the Notes, that will be of the exclusive responsibility of each IBERCLEAR participant authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notes."
Other Relevant Terms
1. Listing (if yes, specify Application will be made for Stock the Notes to be admitted to trading Exchange): on AIAF, Mercado de Renta Fija. 2. Details of Clearance System The Notes will be registered Approved by the Bank and the with Sociedad de Gestión Global Agent and Clearance and de los Sistemas de Registro, Settlement Procedures: Compensación y Liquidación de Valores, S.A. Unipersonal (IBERCLEAR) as managing entity of the central registry of the Spanish settlement system. Consequently, no global certificates will be issued in respect of the Notes. Settlement relating to the Notes, as well as payment of interest and redemption of principal amounts, will be performed within IBERCLEAR's account-based system. The purchase of the Notes means the express acceptance of IBERCLEAR procedures and regulations, including (without limitation) the recognition that once the Issuer through the IBERCLEAR Paying Agent credits the amounts due to the relevant IBERCLEAR participans, the Issuer will have no further responsibility or liability relating to payments made in respect of the Notes, which will instead be the exclusive responsibility of each IBERCLEAR participants. 3. Syndicated: No 4. Commissions and Concessions: None The Issuer will pay (directly or through the Dealer, who has agreed to pay on behalf of the Issuer in case it is needed) for all material expenses related to the issuance of the Notes. 5. Estimated Total Expenses: 6. Codes: (a) ISIN: ES0313681001 (a) FISN: BID/2.205 BO 20240721 (b) CFI: DBFUGB (c) Other: Not Applicable 7. Identity of Dealer(s)/Manager(s): Banco Bilbao Vizcaya Argentaria, S.A. 8. Identity of the IBERCLEAR Citibank Europe Plc. will act Paying Agent: as the IBERCLEAR Paying Agent under the Notes and be a Paying Agent under the Conditions. 9. Intended to be held in a Not Applicable manner which would allow Eurosystem eligibility: 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. (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) Spain: The Notes may not be sold or distributed, nor may any subsequent resale of Notes be carried out in Spain other than by institutions authorized under the Spanish Securities Market Act and related legislation to provide investment services in Spain and except in compliance with the provisions (d) Singapore: of the Spanish Securities Market Act. The offers of Notes in Spain have been and will only be directed specifically at or made to professional clients (clientes profesionales) as defined under Article 205 of the Spanish Securities Market Act and Article 58 of Royal Decree 217/2008, of 15 February, and eligible counterparties (contrapartes elegibles) as defined under Article 207 of the Spanish Securities Market Act. 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). (e) 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, 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 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 EU 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 and professional clients, each as defined in MiFID II; and (ii) all channels for distribution to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into consideration the EU 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 EU manufacturer's target market assessment) and determining appropriate distribution channels.
For the purposes of this provision, the expression "EU manufacturer" means the Dealer and the expression "MiFID II" means Directive 2014/65/EU, as amended.
2. Supplemental Prospectus Information
The Prospectus is hereby supplemented with the following information, which shall be deemed to be incorporated in, and to form part of, the Prospectus.
The Notes and the Coupons appertaining thereto will be transferred and redeemed through the IBERCLEAR participant(s) authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notes using a new technology based on Distributed Ledger Technology (the "DLT") sponsored by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. ("BME") and IBERCLEAR.
In accordance with Condition 5 and 7, the Notes will be issued in accordance with Spanish law by means of dematerialized book entry and registered and settled through Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. ("IBERCLEAR"). The subscription of the Notes means the express acceptance of IBERCLEAR procedures and regulations, and in particular the express recognition that once the Issuer, through its Paying Agent, credits the amounts due to the relevant IBERCLEAR participant(s) authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notes , it will not have any responsibility or liability relating to payments made in respect of the Notes, that will be of the exclusive responsibility of each IBERCLEAR participant authorized by IBERCLEAR to hold IBERCLEAR Book-entry Notes .
The DLT platform is a permissioned and private network, operated, administered, and governed by IBERCLEAR so that the access to writer nodes of the network is limited to the participants that have been expressly authorized (permitted) by IBERCLEAR to hold IBERCLEAR Book-entry Notes.
Although the DLT network has not previously been used, it has been tested by IBERCLEAR according to the use to be made in the framework of this issuance of Notes. The Issuer cannot assure the investors that this new network created and operated by IBERCLEAR, with which the Issuer has not been involved, will not be subject to any potential operational or security issue. In any event, from the moment the IBERCLEAR Book-Entry Notes are issued, the legacy standard book-entry system of the relevant IBERCLEAR Participant authorized to hold IBERCLEAR Book-Entry Notes will constitute the back-up system in case of any potential, operational or DLT security issue.
Neither the Issuer nor BBVA, as Dealer and/or custodian, have any responsibility whatsoever with respect to the functionality of the DLT platform, and by purchasing the IBERCLEAR Book-Entry Notes, each investor shall be deemed that neither the Issuer nor BBVA, as Dealer and/or custodian, will be liable for any failure related to the technological set up of the DLT platform or its results.
The following supplements the Risk Factors section of the Prospectus regarding the use of distributed ledger technology when issuing the Notes:
The technology is new and many of its uses may be untested. The mechanics of using distributed ledger technology to transact in securities is relatively new and untested. There is no assurance that widespread adoption will occur.
A lack of expansion in the usage of blockchain technology could adversely affect an investment in the notes, including in any secondary market for the Notes. A breach to one blockchain could cause investors, and the public generally, to lose trust in blockchain technology and increase reluctance to issue and invest in securities recorded on blockchains. Furthermore, blockchain technology is subject to a rapidly evolving regulatory landscape in the United States, Spain and in other countries, which might include security, privacy or other regulatory concerns that could require changes to blockchain networks. This may adversely affect an investment in the Notes.
Malicious actors could manipulate distributed ledger networks and smart contract technology upon which digital assets rely and increase the vulnerability of distributed ledger networks.
If a malicious actor, including a state-sponsored actor, is able to hack or otherwise exert unilateral control over a particular distributed ledger network, or the digital assets on such a network, that actor could attempt to divert assets from that distributed ledger or otherwise prevent the confirmation of transactions recorded on that distributed ledger. Digital assets have been the subject of attempted manipulation by hackers to use them for malicious purposes. For example, misuses could occur if a malicious actor obtains a majority of the processing power controlling the digital asset validating activities and altering the distributed ledger on which digital asset transactions rely. Moreover, if the award for solving transaction blocks for a particular digital asset declines, and transaction fees are not sufficiently high, the incentive to continue validating distributed ledger transactions would decrease and could lead to a stoppage of validation activities. The collective processing power of that distributed ledger would be reduced, which would adversely affect the confirmation process for transactions by decreasing the speed of the adaptation and adjustment in the difficulty for transaction block solutions. Such slower adjustments would make the distributed ledger network more vulnerable to malicious actors' obtaining control of the processing power over distributed ledger network processing. This may adversely affect an investment in the Notes.
The extent to which digital assets are used to fund criminal or terrorist enterprises or launder the proceeds of illegal activities could materially impact adoption of digital assets.
The potential, or perceived potential, for anonymity in transfers of digital assets, as well as the decentralized nature of distributed ledger networks, has led some terrorist groups and other criminals to solicit certain digital assets for capital raising purposes. As digital assets have grown in both popularity and market size, government authorities have been examining the operations of distributed ledger technology and digital assets, their users, investors and exchanges, concerning the use of digital assets for the purpose of laundering the proceeds of illegal activities or funding criminal or terrorist enterprises. In addition to the current market, new distributed ledger networks or similar technologies may be developed to provide more anonymity and less traceability. The use of digital assets for illegal purposes, or the perception of such use, could result in significant reputational damage, damage to the reputation of digital assets and a loss of confidence in the services provided by the distributed ledger technology community as a whole. This may adversely affect an investment in the Notes.
Distributed ledger technology is exposed to failure of technology partners.
Distributed ledger technology relies on other technology providers to provide certain services as part of the product. Should these services no longer be available, for whatever reason, you may no longer be able to access your investment.
Cyber Security Incidents.
Cyber security incidents may compromise an issuer, its operations or its business. Cyber security incidents may also specifically target a user's transaction history, digital assets, or identity, thereby leading to privacy concerns. In addition, certain features of blockchain technology, such as decentralization, open-source protocol, and reliance on peer-to-peer connectivity, may increase the risk of fraud or cyber-attack by potentially reducing the likelihood of a coordinated response. This may adversely affect an investment in the Notes.
INTER-AMERICAN DEVELOPMENT BANK
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END
IODURUORUWUWAAR
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August 10, 2022 09:32 ET (13:32 GMT)
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