Belize Makes History With ‘Blue Bond’ Restructuring

Belize Makes History With ‘Blue Bond’ Restructuring

S&C advises nation on innovative deal that funds ocean conservation

November 17, 2021

Belize is leading the way in innovative “debt-for-nature” swaps. In early November, the Central American nation became the first country in the Americas to complete a debt conversion that will fund ocean and marine life conservation. By restructuring all of its approximately $550 million of external commercial debt—an amount that represents 30 percent of the country’s GDP—Belize will save $250 million and dedicate a significant portion for conservation.

A significant portion of the savings will flow to a national, independent conservation fund that will give grants to agencies and conservation partners and will be used to create an endowment, driving $180 million into conservation over two decades. The nation has also committed to protect 30 percent of its ocean territory, which includes the world’s second-largest coral reef, seagrass beds, mangroves and other vital marine habitats. 

A multi-disciplinary team at Sullivan & Cromwell advised Belize at every step of this complex, groundbreaking transaction, including lawyers from our practices for Latin America, Sovereign Finance, Restructuring and Project Development & Finance. Last year, the Firm assisted Belize in an earlier debt relief action, advising on a successful consent solicitation that led to the capitalization of interest on these bonds.
Notable features of this deal include:

  • One of the largest cash take-out restructurings of a sovereign bond using collective action clauses
  • U.S. government support through provision of political risk insurance
  • Partnership with a leading conservation organization, The Nature Conservancy
Learn more about our practices in Latin America, Sovereign Finance, Restructuring, Project Development & Finance and ESG.