Issue of Debt

Inter-American Development Bank

09 July 2024

 

PRICING SUPPLEMENT

Inter-American Development Bank

Global Debt Program

Series No.: 869

Tranche No.: 5

INR 1,800,000,000 7.00 percent Notes due April 17, 2033 (the "Notes")

as from July 3, 2024 to be consolidated and form a single series with the Bank's INR 4,250,000,000 7.00 percent Notes due April 17, 2033, issued on April 17, 2023 (the "Series 869 Tranche 1 Notes"), the Bank's INR 4,250,000,000 7.00 percent Notes due April 17, 2033, issued on July 12, 2023 (the "Series 869 Tranche 2 Notes"), the Bank's INR 3,500,000,000 7.00 percent Notes due April 17, 2033, issued on September 8, 2023 (the "Series 869 Tranche 3 Notes") and the Bank's INR 1,700,000,000 7.00 percent Notes due April 17, 2033, issued on March 19, 2024 (the "Series 869 Tranche 4 Notes") payable in United States Dollars

Issue Price: 99.31 percent plus 77 days' accrued interest

Application has been made for the Notes to be admitted to the

Official List of the United Kingdom Listing Authority and

to trading on the London Stock Exchange plc's

UK Regulated Market

Citigroup

The date of this Pricing Supplement is as of June 28, 2024

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 / 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.:		869
		Tranche No.:		5
	2.	Aggregate Principal Amount:		INR 1,800,000,000 As from the Issue Date, the Notes will be consolidated and form a single series with the Series 869 Tranche 1 Notes, the Series 869 Tranche 2 Notes, the Series 869 Tranche 3 Notes and the Series 869 Tranche 4 Notes.
	3.	Issue Price:		INR 1,814,160,821.92, which amount represents the sum of (a) 99.31 percent of the Aggregate Principal Amount plus (b) the amount of INR 26,580,821.92 representing 77 days' accrued interest. The Issue Price will be payable in USD in the amount of USD 21,732,983.79 at the agreed rate of 83.475 INR per one USD.
	4.	Issue Date:		July 3, 2024
	5.	Form of Notes (Condition 1(a)):		Registered only
	6.	Authorized Denomination(s) (Condition 1(b)):		INR 1,000,000 and integral multiples thereof
	7.	Specified Currency (Condition 1(d)):		The lawful currency of the Republic of India ("Indian Rupee" or "INR"), provided that all payments in respect of the Notes will be made in United States Dollars ("U.S.$" or "USD").
	8.	Specified Principal Payment Currency (Conditions 1(d) and 7(h)):		USD
	9.	Specified Interest Payment Currency (Conditions 1(d) and 7(h)):		USD
	10.	Maturity Date (Condition 6(a); Fixed Interest Rate and Zero Coupon):		April 17, 2033; provided that if the Rate Fixing Date (as defined below) for the scheduled Maturity Date is postponed due to an Unscheduled Holiday (as defined below), then the Maturity Date shall be the next following relevant Fixing Business Day, subject to the provisions in respect of any Unscheduled Holiday set out below under "Deferral Period for Unscheduled Holiday". The Maturity Date is subject to adjustment in accordance with the 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)):		April 17, 2024
	13.	Fixed Interest Rate (Condition 5(I)):		Condition 5(I) as amended and supplemented below, shall apply to the Notes.
		(a)  Interest Rate:		7.00 percent per annum
		(b)  Fixed Rate Interest Payment Date(s): (c)  Interest Period:		Annually on each April 17, commencing on April 17, 2025 and ending on, and including, the Maturity Date (subject, in each case, to the provisions set forth in the Fallback Provision).  Each Fixed Rate Interest Payment Date is subject to the Business Day Convention, but with no adjustment to the amount of interest otherwise calculated. Each period from and including each Fixed Rate Interest Payment Date to but excluding the next following Fixed Rate Interest Payment Date, provided that the initial Interest Period will commence on and include the Interest Commencement Date, and the final Interest Period will end on but exclude the Maturity Date. 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 specified below. 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 each Interest Period shall be a USD amount calculated on the relevant Rate Fixing Date (as defined below) as follows: INR 70,000 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).
				The "Reference Rate" means in respect of a Rate Fixing Date, the USD/INR spot exchange rate for such date expressed as the amount of INR per one USD, for settlement in two Fixing Business Days, reported by Financial Benchmarks India, Private Ltd (the "FBIL") (https:www.fbil.org.in) on such Rate Fixing Date at approximately 1:30 p.m. Mumbai time, or as soon as practicable thereafter.  If the Reference Rate does not appear on the FBIL's website (https:www.fbil.org.in) or on any successor page on the Rate Fixing Date, then the Reference Rate shall be determined by the Calculation Agent in accordance with the Fallback Provision. "Rate Fixing Date" means the Scheduled Rate Fixing Date. "Scheduled Rate Fixing Date" means the date which is five Fixing Business Days prior to each Interest Payment Date or the Maturity Date, or such other date on which an amount in respect of the Notes is due and payable, as the case may be.  If any Scheduled Rate Fixing Date is an Unscheduled Holiday (as defined below), the relevant Rate Fixing Date shall be the next following relevant Fixing Business Day, subject to the provisions in respect of any Unscheduled Holiday set out below under "Deferral Period for Unscheduled Holiday". "Fixing Business Day" means a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in Mumbai. "Unscheduled Holiday" means a day that is not a Fixing 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 Mumbai, two Fixing Business Days prior to the relevant Rate Fixing Date.
				Adjustments to Interest Payment Date and Maturity Date: If a Scheduled Rate Fixing Date is adjusted in accordance with the Business Day Convention, then the Interest Payment Date or Maturity Date relating to such Scheduled Rate Fixing Date shall be as soon as practicable, but in no event later than two (2) Relevant Business Days after the date on which the Reference Rate for such Interest Payment Date or Maturity Date is determined. If any Interest Payment Date or Maturity Date is adjusted in accordance with the preceding sentence, then such adjustment (and the corresponding payment obligations to be made on such dates) shall apply only to such Interest Payment Date or Maturity Date and no further adjustment shall apply to the amount of interest or principal payable. In no event shall an adjustment of any Interest Payment Date or Maturity Date in accordance with the preceding paragraphs result in such Interest Payment Date or Maturity Date falling prior to the date on which such Interest Payment Date or Maturity Date was originally due to fall or any further interest or other additional payment in respect of any such adjustment. Fallback Provision: If the Reference Rate does not appear on the FBIL's website (https:www.fbil.org.in) or on any successor page on the Rate Fixing Date, then the Reference Rate for such Rate Fixing Date shall be determined by the Calculation Agent by requesting quotations for the mid USD/INR spot foreign exchange rate from five Reference Banks as selected by the Calculation Agent at or about 1:30 p.m. Mumbai time on either (i) the first day (other than a Saturday or a Sunday) following the Rate Fixing Date, if such day is a Relevant Business Day, or (ii) if the first day (other than a Saturday or a Sunday) following the Rate Fixing
				Date is not a Relevant Business Day, the Rate Fixing Date. If five or four quotations are provided as requested, the Reference Rate will be the arithmetic mean (rounded to the nearest whole Indian Rupee, 0.05 being rounded upwards) of the remaining three or two such quotations, as the case may be, for such rate provided by the Reference Banks, after disregarding the highest such quotation and the lowest such quotation (provided that, if two or more such quotations are the highest such quotations, then only one of such quotations shall be disregarded, and if one or more such quotations are the lowest quotations, then only one of such lowest quotations will be disregarded). If only three or two such quotations are provided as requested, the Reference Rate shall be determined as described above except that the highest and lowest quotations will not be disregarded. If only one or no such quotations are provided as requested, or if the Calculation Agent determines in its sole discretion that no suitable Reference Banks active in the USD/INR currency or foreign exchange markets will provide quotes, the Calculation Agent shall be entitled to calculate the Reference Rate acting in good faith and in a commercially reasonable manner, having taken into account relevant market practice, by reference to such additional sources as it deems appropriate; and in such case the Calculation Agent shall notify the Issuer and the Global Agent as soon as reasonably practicable that the Reference Rate is to be so determined. Where: "Calculation Agent" means Bank of America, N.A., or its duly appointed successor.
				"Deferral Period for Unscheduled Holiday" means that in the event any Scheduled Rate Fixing Date is postponed due to the occurrence of an Unscheduled Holiday, and if the Rate Fixing Date in respect thereof has not occurred on or before the 14th calendar day after the Scheduled Rate Fixing Date (any such period being a "Deferral Period"), then the next day after the Deferral Period that would have been a Fixing Business Day but for the Unscheduled Holiday, shall be deemed to be the Rate Fixing Date. "Reference Banks" means leading dealers, banks or banking corporations which regularly deal in the INR/USD exchange market, as selected by the Calculation Agent in its sole discretion, acting in good faith and in a commercially reasonable manner
		(c)  Business Day Convention:		Following Business Day Convention
		(d)  Fixed Rate Day Count Fraction(s):		Actual/Actual (ICMA)
	14.	Relevant Financial Center:		London, Mumbai and New York
	15.	Relevant Business Day:		London, Mumbai and New York
	16.	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 on 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). If payment of the Redemption Amount occurs later than on the scheduled Maturity Date in the event of any postponement described herein, no accrued interest shall be payable in respect of such period of postponement following the scheduled Maturity Date.
	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 the Notes become due and payable as provided in 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 "16. Redemption Amount (Condition 6(a))" plus accrued and unpaid interest, if any, as determined in accordance with "13. 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) Fixing Business Days prior to the date upon which the Notes become due and payable as provided in Condition 9 (Default).
	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 United Kingdom Listing 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 Global Agent and Clearance and Settlement Procedures:		Euroclear Bank SA/NV and/or Clearstream Banking, S.A.
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:		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)  Common Code:		260824210
		(b)  ISIN:		XS2608242108
7.		Identity of Dealer:		Citigroup Global Markets Limited
8.		Provision 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.
		(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)  India:		The distribution of this Pricing Supplement and the offering and sale of the Notes in India is restricted by law.  Persons into whose possession this Pricing Supplement comes are required to inform themselves about and to observe any such restrictions.  This Pricing Supplement does not constitute, and may not be used for or in connection with, an offer or solicitation by anyone in India. No person in India (resident or otherwise) or any person regulated in India by any Indian government or any governmental agency or department, semi-governmental or judicial entity or authority including without limitation, any stock exchange or any self regulatory organisation established under statute or applicable law in India (such as foreign institutional investors registered with the Securities and Exchange Board of India), are, directly or indirectly, eligible to buy, sell or deal in the Notes and shall not be eligible to participate in this offering or directly or indirectly derive any ownership, economic or other benefits from or in such Notes.
		(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 / 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 EUWA and (iv) the expression "UK MiFIR Product Governance Rules" means the FCA Handbook Product Intervention and Product Governance Sourcebook.

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, which may be accessed as described under the heading "Availability of Information and Incorporation by Reference" in the Prospectus)."

3.         Additional Investment Considerations: 

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.

There are various risks associated with the Notes including, but not limited to, exchange rate risk, price risk and liquidity risk. Investors should consult with their own financial, legal and accounting 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.  Holders of the Notes should also consult with their professional tax advisors regarding tax laws applicable to them. 

            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 Indian Rupee and the USD.  Currency exchange rates are volatile and will affect the holder's return.  In addition, the government of India 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 India or elsewhere could lead to significant and sudden changes in the exchange rate between the Indian Rupee and the USD.

            The Indian Rupee is an emerging market currency.  Emerging market currencies may be subject to particularly substantial volatility, as well as to government actions including currency controls, devaluations and other matters which could materially and adversely affect the value of the Notes.

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 INR-USD exchange rate would yield.

4.         United Stated Federal Income Tax Matters:

            The following supplements the discussion under the "Tax Matters" section of the Prospectus regarding the U.S. federal income tax treatment of the Notes, and is subject to the limitations and exceptions set forth therein.  Any tax disclosure in the Prospectus or this Pricing Supplement is of a general nature only, is not exhaustive of all possible tax considerations and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular prospective investor.  Each prospective investor should consult its own tax advisor as to the particular tax consequences to it of the acquisition, ownership, and disposition of the Notes, including the effects of applicable U.S. federal, state, and local tax laws and non-U.S. tax laws and possible changes in tax laws.

Because the Notes are denominated in the Indian Rupee, 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 U.S. dollar value of the Indian Rupee amount of the payment, calculated at the currency exchange rate in effect on the date of payment.  The U.S. dollar amount that is actually received by the United States holder may differ from the amount determined under the preceding sentence, since the U.S. dollar 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 U.S. dollar 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.

In addition, it is possible that the U.S. Internal Revenue Service could assert that the Notes should be treated as issued with original issue discount ("OID") for United States federal income tax purposes because it is possible that an interest payment on the Notes could be deferred beyond one year due to the Business Day Convention. If so treated, then a United States holder that is otherwise subject to the cash basis method of accounting for tax purposes will be required to accrue the interest payments on the Notes in ordinary income. We intend to take the position that the Notes should not be treated as issued with OID for United States federal income tax purposes. 

INTER-AMERICAN DEVELOPMENT BANK

 

END