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Credit Suisse finances The Nature Conservancy’s Blue Bond for marine conservation for Belize
Credit Suisse and The Nature Conservancy (‘TNC’) announce the completion of the world’s largest Blue Bond for Conservation, allocating capital towards debt sustainability and marine conservation for Belize.
This is TNC’s inaugural transaction under its Blue Bonds for Conservation program launched in 2019, which raises investment capital for island and coastal nations to restructure a portion of their national debt and create long-term sustainable finance for marine protection, sustainable economic development and addressing climate change.
Credit Suisse acted as sole structurer and arranger of the Blue Bond, raising USD 364 million for TNC pursuant to its Blue Bonds for Conservation program. TNC’s unique Blue Bonds program, and sponsorship of this transaction, creates dedicated funding to help Belize realize its marine conservation efforts, a key factor in the prosperity of the Belizean economy. The U.S. International Development Finance Corporation (DFC) provided political risk insurance to enable this innovative structure supporting this transaction. The ocean areas and marine ecosystems of Belize account for a significant part of the country’s economy; they are a significant part of the country’s ecotourism and are key to the prosperity of coastal communities in particular.
TNC and the Government of Belize agreed to work together on restructuring the entirety of Belize’s external commercial debt, thereby significantly reducing the country’s existing debt service costs while also securing funding for conservation activities. Proceeds of the Blue Bonds are being used by Belize to repurchase a portion of its USD bonds due 2034, reducing debt service costs and improving long-term debt sustainability. A portion of the financing, USD 23.5 mn, will also be placed into an endowment that will set aside funding for marine conservation accessible from 2041, ultimately aiding in the long-term planning and protection of Belize’s marine ecosystems. As part of the terms of this transaction, approximately USD 4 mn annually, paid in Belize dollars, over the next 20 years will flow to a new, independent conservation fund for Belize, which will disburse funds to marine and coastal conservation projects. In addition, TNC and Belize agreed to numerous conservation commitments and milestones that will help achieve Belize’s conservation goals to the benefit of nature, the Belizean people and the country’s economy.
Marisa Drew, Chief Sustainability Officer and Head of Sustainability Strategy, Advisory & Finance (SSAF) at Credit Suisse, said: “We are delighted to continue our collaboration with The Nature Conservancy whose efforts in environmental conservation are unparalleled. We are proud to have successfully offered TNC our financial and capital markets expertise to support countries as they build more resilient economies, bring benefit to communities and conserve marine ecosystems. This transaction demonstrates Credit Suisse’s commitment to ocean and marine conservation through financial ingenuity.”
Jennifer Morris, Chief Executive Officer at The Nature Conservancy said: “The twin crises of the climate emergency and biodiversity loss require rethinking and redesigning the ways we invest in our economies and natural assets. The Belize Blue Bond is a world-leading example of how a country can reduce its debt and create more fiscal space to dedicate substantial funds to its conservation ambitions. Belize is showing that when we work together, combining science, global finance and partnerships from the national to the community level, we can achieve enormous wins for people and nature.”
James Howard, Global Head of Investor Products & Hybrids, at Credit Suisse, said: “Our leading global Investor Products franchise is constantly seeking to innovate for our clients and bring unique products to market. We are happy to have delivered this unique Blue Bond financing for Belize, as this transaction represents both innovation in sustainable finance and serves as a blueprint that can be scaled across many other countries. We are confident that transactions using this type of structure will become more frequent in the market, offering countries a way to improve the sustainability of their debt while having a meaningful environmental impact.”
David Marchick, Chief Operating Officer at DFC, said: “DFC is proud to provide political risk insurance to enable this complex and remarkably impactful joint project with TNC and the Government of Belize, along with Credit Suisse. This transaction serves as a model for future partnerships DFC is keen to pursue. This transaction is a win-win-win – it reduces Belize's indebtedness, creates an estimated $180 million stream to invest in marine management, coral reef and mangrove restoration, and promotes Belize's blue economy. Belize's marine ecosystem is one of the most unique in the world, and this project will help protect and preserve it for the future.”
As part of this transaction, TNC will work closely with Belize to provide technical assistance to lead the design and establishment of the new conservation fund and facilitate the participatory marine spatial planning process to identify and develop Belize’s new marine protections.
This media release is not an offer of the Blue Bonds or any other security for sale in the United States or any other jurisdiction. The Blue Bonds have not been, and will not be, registered for sale under the Securities Act of 1933, as amended, and they may not be offered or sold in the United States absent an exemption from registration.