REG - Inter-American Dev - Issue of Debt
28/09/2022 08:15
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RNS Number : 9637A Inter-American Development Bank 28 September 2022
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No: 845
COP 25,000,000,000 11.10 percent Notes due September 27, 2027 (the "Notes")
Payable in United States Dollars
Issue Price: 100.00 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, 2022.
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.: 845
2. Aggregate Principal Amount: COP 25,000,000,000
3. Issue Price: COP 25,000,000,000, which is 100.00 percent of the Aggregate Principal Amount
The Issue Price will be payable in USD in the amount of USD 5,760,368.66 at
the agreed rate of COP 4,340.00 per one USD.
4. Issue Date: September 27, 2022
5. Form of Notes Registered only
(Condition 1(a)):
6. New Global Note: No
7. Authorized Denomination(s) COP 10,000,000
(Condition 1(b)):
8. Specified Currency Colombian Peso ("COP"), the lawful currency of the Republic of Colombia,
(Condition 1(d)): provided that all payments in respect of the Notes will be made in United
States Dollars ("USD")
9. Specified Principal Payment Currency USD
(Conditions 1(d) and 7(h)):
10. Specified Interest Payment Currency USD
(Conditions 1(d) and 7(h)):
11. Maturity Date September 27, 2027
(Condition 6(a); Fixed Interest Rate and Zero Coupon):
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 Fixed Interest Rate (Condition 5(I))
(Condition 5):
13. Interest Commencement Date (Condition 5(III)): Issue Date (September 27, 2023)
14. Fixed Interest Rate (Condition 5(I)):
(a) Interest Rate: 11.10 percent per annum
(b) Fixed Rate Interest Payment Date(s): Annually on September 27 in each year, commencing on September 27, 2023, up to
and including 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. 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 any Interest Period shall be a USD amount
calculated using the Reference Rate determined as of the relevant Rate Fixing
Date (as defined below) as follows:
COP 1,110,000 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).
"Bogotá Business Day" means a day (other than a Saturday or a Sunday) on
which banks and foreign exchange markets are open for business in Bogotá.
"'COP TRM' (COP02) Rate" means, in respect of a Rate Fixing Date, the COP/USD
fixing rate for USD, expressed as the amount of COP per one USD, for
settlement on the same day reported by the Colombian Financial Superintendency
(www.banrep.gov.co) as the "Tasa Representativa del Mercado (TRM)" (also
referred to as the "Tasa de Cambio Representativa del Mercado" (TCRM)) as
published on the Reuters Screen CO/COL03 Page opposite the caption "TCRM"
below the heading "Hoy" at approximately 5:00 p.m. Bogotá time on such day,
but not later than 10:30 a.m., Bogotá time, on the first Bogotá Business Day
following the relevant Rate Fixing Date (or such other page or service as may
replace such page for the purposes of displaying such "COP TRM" (COP02) Rate),
provided that the "COP TRM" (COP02) Rate found on the website of the Colombian
Financial Superintendency shall prevail in case of conflict with the rate
appearing on Reuters Screen CO/COL03 Page. If the Reuters Screen CO/COL03 Page
no longer reports such rate or is no longer available and has not been
replaced by any other page or service, the Calculation Agent shall be entitled
to obtain such rate as reported by the Colombian Financial Superintendency
from any other screen or information source that it deems appropriate in good
faith and in a commercially reasonable manner.
"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 COP/USD exchange rate, expressed as the amount of COP per one USD
determined by the Calculation Agent on the first Bogotá Business Day
following the relevant Rate Fixing Date by reference to the applicable "COP
TRM" (COP02) Rate; or
(b) in the event that the "COP TRM" (COP02) Rate is not available on the
first Bogotá Business Day following the relevant Rate Fixing Date, the
Calculation Agent shall determine that a Price Source Disruption Event has
occurred, and shall promptly inform the Bank 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 (other than a Saturday or a Sunday) on
which banks and foreign exchange markets are open for business in New York and
Bogotá.
Applicable Disruption Fallbacks (in order of application):
1. Valuation Postponement. "Valuation Postponement" means, for purposes of
obtaining a Reference Rate, that 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. "Calculation
Agent Determination of Reference Rate" means, for the purpose 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).
"Maximum Days of Postponement" means fourteen (14) calendar days.
"Unscheduled Holiday" means that a day 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 Bogotá 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), Unadjusted
(e) Calculation Agent: Citibank NA, New York
15. Relevant Financial Center: Bogotá and New York
16. Relevant Business Days: Bogotá 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 6(e)): No
19. Redemption at the Option of the Noteholders (Condition 6(f)): No
20. Early Redemption Amount (including accrued interest, if In the event the Notes become due and payable as provided in Condition 9
applicable) (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 (if yes, specify Stock Application has been made for the Notes to be admitted to the Official List of
Exchange): 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 Banking S.A.
Global Agent and Clearance 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 Expense: 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, if applicable.
6. Codes:
(a) Common Code: 253498056
(b) ISIN: XS2534980565
7. Identity of Dealer(s)/Manager(s): Citigroup Global Markets Limited
8. Provisions for Registered Notes:
(a) Individual Definitive Registered Notes Available on Issue No
Date:
(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 Not Applicable
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) Colombia This Pricing Supplement does not constitute and may not be used for, or in
connection with, a public offering as defined in the laws of the Republic of
Colombia and shall be valid in Colombia only to the extent permitted by
Colombian law. Therefore, the Notes will not be marketed, offered, sold or
distributed in Colombia or to Colombian residents except in circumstances
which do not constitute a public offering. Any promotional or advertisement
activity shall comply with the requirements set out by Colombian law. The
Notes have not been registered in the Republic of Colombia and may only be
exchanged in the territory of the Republic of Colombia to the extent permitted
by applicable law. The information contained in this Pricing Supplement is
provided for assistance purposes only and no representation or warranty is
made as to the accuracy or completeness of the information contained herein.
(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 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 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 COP and the USD. Currency exchange rates are volatile and
will affect the holder's return. In addition, the government of Colombia 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 Colombia or elsewhere could lead to significant and sudden
changes in the exchange rate between the COP 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. Matters relating to United States Federal Income Tax
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 Notes are denominated in COP, 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" under
the "United States Holders" section. Pursuant to such rules, a United States
holder should determine amounts received with respect to a Note (including
principal and interest) by reference to the USD value of the COP amount of the
payment, calculated at the currency exchange rate in effect on the date of
payment. The USD amount that is actually received by the United States
holder may differ from the amount determined under the preceding sentence,
since the USD amount of the payment will be determined by reference to the
Reference Rate as of the relevant Rate Fixing Date. Accordingly, a United
States holder of the Notes may recognize United States source foreign currency
gain or loss in an amount equal to such difference (in addition to any foreign
currency gain or loss otherwise recognized upon the receipt of an interest
payment or a sale or retirement of the Notes). The U.S. Internal Revenue
Service could take the position, however, that the amounts received by a
United States holder in respect of a Note should be equal to the USD amount
that is actually received by the United States holder. Prospective United
States holders of the Notes should consult their tax advisors regarding these
rules.
INTER-AMERICAN DEVELOPMENT BANK
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