REG - Inter-American Dev - Issue of Debt
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RNS Number : 7578V Inter-American Development Bank 06 March 2026
PRICING SUPPLEMENT
Inter-American Development Bank
Global Debt Program
Series No: 1040
MXN3,000,000,000 Zero Coupon Notes due March 6, 2046 (the "Notes")
Issue Price: 16.827 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
BofA Securities
The date of this Pricing Supplement is March 3, 2026
The Series 1040 Notes have been issued with original issue discount for U.S.
tax purposes; therefore, the Notes are not intended to be sold or resold to
persons subject to U.S. tax laws.
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 base prospectus for the purposes of Regulation (EU) 2017/1129 (as
amended, the "Prospectus Regulation"), the Public Offers and Admissions to
Trading Regulations 2024, or the Prospectus Rules: Admission to Trading on a
Regulated Market sourcebook). 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 / 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.: 1040
2. Aggregate Principal Amount: MXN3,000,000,000
3. Issue Price: MXN504,810,000, which is 16.827 percent of the Aggregate Principal Amount
4. Issue Date: March 6, 2026
5. Form of Notes
(Condition 1(a)):
Registered only, as further provided in paragraph 8 of "Other Relevant Terms"
below.
6. New Global Note: No
7. Authorized Denomination(s)
(Condition 1(b)):
MXN100,000
8. Specified Currency Mexican Peso ("MXN") being the lawful currency of the United Mexican States
(Condition 1(d)):
9. Specified Principal Payment Currency MXN
(Conditions 1(d) and 7(h)):
10. Specified Interest Payment Currency MXN
(Conditions 1(d) and 7(h)):
11. Maturity Date
(Condition 6(a); Fixed Interest Rate):
March 6, 2046
The Maturity Date is subject to the Business Day Convention, but with no
adjustment to the amount of interest otherwise calculated.
12. Interest Basis
(Condition 5):
Zero Coupon (Condition 5(IV))
The Notes constitute "Traditional Zero Coupon Notes" under the Conditions.
13. Zero Coupon (Conditions 5(IV) and 6(c)):
(a) Amortization Yield: 9.32 percent per annum
(b) Reference Price: Issue Price
(c) Basis: Compounded annually
(d) Fixed Rate Day Count Fraction(s):
Actual/Actual (ICMA)
14. Relevant Financial Center: New York, London, and Mexico City
15. Relevant Business Days: New York, London, and Mexico City
16. Redemption Amount (Condition 6(a)):
Unless previously redeemed or purchased and cancelled as specified in the
Terms and Conditions, the Notes will be redeemed by the Bank by payment of the
Redemption Amount on the Maturity Date. The Redemption Amount will be
MXN3,000,000,000, being 100 percent of the Aggregate Principal Amount.
17. Issuer's Optional Redemption (Condition 6(e)):
No
18. Redemption at the Option of the Noteholders (Condition 6(f)):
No
19. Early Redemption Amount (including accrued interest, if applicable) (Condition
9):
In the event of any Note becoming due and payable prior to the Maturity Date
in accordance with Condition 9, the Early Redemption Amount will be an amount
equal to the Amortized Face Amount of such Note (calculated in accordance with
Condition 6(c)).
20. Governing Law: New York
Other Relevant Terms
1. Listing: Application has been made for the Notes to be admitted to the Official List of
the Financial Conduct Authority and to trading on the London Stock Exchange
plc's UK Regulated Market
2. Details of Clearance System Approved by the Bank and the
Global Agent and Clearance and
Settlement Procedures:
Euroclear Bank SA/NV and/or Clearstream Banking
3. Syndicated: No
4. Commissions and Concessions: None. 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: The Dealer has agreed to pay for all material expenses related to the issuance
of the Notes, except the Issuer will pay for the London Stock Exchange listing
fees, if applicable.
6. Codes:
(a) ISIN: XS3306525786
(b) Common Code: 330652578
7. Identity of Dealer: Merrill Lynch International
8. Provisions for Registered Notes:
(a) Individual Definitive Registered Notes Available on Issue Date:
No
(b) DTC Global Note(s): No
(c) Other Registered Global Notes:
Yes, issued in accordance with the Amended and Restated Global Agency
Agreement, dated as of July 28, 2020, between the Bank, Citibank, N.A., London
Branch as Global Agent, and the other parties thereto.
9. Intended to be held in a manner which would allow Eurosystem eligibility:
Not Applicable
10. Selling Restrictions:
(a) United States:
Under the provisions of Section 11(a) of the Inter-American Development Bank
Act, the Notes are exempted securities within the meaning of Section 3(a)(2)
of the U.S. Securities Act of 1933, as amended, and Section 3(a)(12) of the
U.S. Securities Exchange Act of 1934, as amended.
The Issuer and the Dealer have agreed that the Series 1040 Notes will not be
offered, sold or distributed by the Dealer, directly or indirectly, in the
United States of America, its territories or possessions, or to, or for the
account or benefit of, persons subject to U.S. tax laws in respect of the
interest income on the Notes.
(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) Mexico: The Notes have not been and will not be registered with the National Registry
of Securities (Registro Nacional de Valores) maintained the Mexican National
Banking and Securities Commission (Comisión Nacional Bancaria y de Valores)
and may not be publicly offered or sold in Mexico. The Dealer agrees that it
will not offer or sell the Notes publicly in Mexico and will not distribute
any offering materials in Mexico, provided that the undersigned may offer the
Notes to investors in Mexico that qualify as institutional or accredited
investors, pursuant to the private placement exemption set forth in Article 8
of the Mexican Securities Market Law (Ley del Mercado de Valores).
(d) Singapore: The Dealer represents, warrants and agrees, that it has not offered or sold
any Notes or caused the Notes to be made the subject of an invitation for
subscription or purchase and will not offer or sell any Notes or cause the
Notes to be made the subject of an invitation for subscription or purchase,
and has not circulated or distributed, nor will it circulate or distribute the
Prospectus, this Pricing Supplement or any other document or material in
connection with the offer or sale, or invitation for subscription or purchase,
of the Notes, whether directly or indirectly, to any person in Singapore other
than: (i) to an institutional investor (as defined in Section 4A of the SFA)
pursuant to Section 274 of the SFA or (ii) to an accredited investor (as
defined in Section 4A of the SFA) pursuant to and in accordance with the
conditions specified in Section 275 of the SFA and (where applicable)
Regulation 3 of the Securities and Futures (Classes of Investors) Regulations
2018 of Singapore.
Investors should note that there may be restrictions on the secondary sale of
the Notes under Section 276 of the SFA.
Any reference to the SFA is a reference to the Securities and Futures Act 2001
of Singapore and a reference to any term that is defined in the SFA or any
provision in the SFA is a reference to that term or provision as amended or
modified from time to time including by such of its subsidiary legislation as
may be applicable at the relevant time.
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 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.
11. 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 "on the basis of a U.S. dollar/Specified Currency exchange rate
determined by IADB or its Designee as of the second Business Day prior to such
payment, or, if IADB or its Designee 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, IADB or its Designee shall act in good faith and in a
commercially reasonable manner having taken into account all available
information that it shall deem relevant" and replacing them with the words "on
the due date on the basis of the MXNFIX Spot Rate. If the MXNFIX Spot Rate is
not available, the rate shall be determined by the Calculation Agent in its
sole discretion, acting in good faith and in a commercially reasonable manner,
unless an Official Successor Rate exists, as determined in accordance with
Section 4.1(b) of the 1998 FX and Currency Option Definitions as published by
the International Swaps and Derivatives Association, in which case it shall
apply.
"Calculation Agent" means Merrill Lynch International.
"MXNFIX Spot Rate" means, for a Rate Calculation Date, the USD/MXN official
fixing rate, expressed as the amount of MXN per one USD, for settlement in two
Business Days, reported by the Banco de Mexico (the Mexican Central Bank)
(www.banxico.org.mx) and appears on the Refinitiv Screen MEX01, at
approximately 12:00 noon, Mexico City time, on that Rate Calculation Date.
"Rate Calculation Business Day" means a day (other than a Saturday, Sunday or
public holiday) on which commercial banks are open for general business
(including dealings in foreign exchange) in Mexico City and in New York City.
"Rate Calculation Date" means the day which is two Rate Calculation Business
Days before the due date of the relevant amount under these Conditions.""
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 / 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
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 European Union (Withdrawal) Act 2018, as amended, and (iv) the expression
"UK MiFIR Product Governance Rules" means the FCA Handbook Product
Intervention and Product Governance Sourcebook.
2. Use of Proceeds
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 Bank's mission is to improve lives in Latin
America and the Caribbean countries by contributing to the acceleration of the
process of economic and social development and by supporting efforts to reduce
poverty and inequality in a sustainable, climate friendly way. 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 net proceeds from the sale of the Notes will be
included in the ordinary capital resources of the Bank, used in its ordinary
operations, and will not be committed or earmarked for lending to, or
financing of, any specific loans, projects, or programs.
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 Information Statement)."
3. Additional Investment Considerations
Although the net proceeds from the sale of the Notes will be included in the
ordinary capital resources of the Bank, used in its ordinary operations, the
Notes may not satisfy an investor's requirements if the investor seeks to
invest in assets with certain sustainability characteristics. No assurance is
or can be given to investors that the use of proceeds will satisfy, whether in
whole or in part, any present or future investor expectations or requirements
regarding any investment criteria or guidelines applicable to any investor or
its investments. In addition, no assurance is or can be given to investors
that any projects undertaken by the Bank will meet any or all investor
expectations regarding "sustainable" or other equivalently-labelled
performance objectives or that any adverse environmental, social and/or other
impacts will not occur during the implementation by the borrower or any other
implementing entity of any projects. Furthermore, it should be noted that
there is currently no clearly-defined definition (legal, regulatory or
otherwise) of, nor market consensus as to what constitutes, a "sustainable" or
an equivalently-labelled project or as to what precise attributes are required
for a particular project to be defined as "sustainable" or such other
equivalent label and if developed in the future, Notes may not comply with any
such definition or label.
There can be no assurance that the net proceeds from the sale of any
particular tranche of Notes will be totally or partially disbursed for any
projects undertaken by the Bank within the term of such Notes. Not all
projects undertaken by the Bank will be completed within the specified period
or with the results or outcome as originally expected or anticipated by the
Bank and some planned projects might not be completed at all. Each potential
purchaser of the Notes should determine for itself the relevance of the
information contained in this Prospectus regarding the use of proceeds and its
purchase of the Notes should be based upon such investigation as it deems
necessary.
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.
INTER-AMERICAN DEVELOPMENT BANK
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