S&C Advises Belize in Historic “Blue Bond” Restructuring To Support Ocean Conservation

November 17, 2021

Belize has become the first country in the Americas to structure a debt conversion that will fund ocean and marine life conservation. The Central American nation is restructuring all of its approximately $550 million of external commercial debt—an amount that represents 30 percent of the country's GDP—saving $250 million in the process.
Belize will invest a portion of the savings in a national, independent conservation fund that will give grants to government agencies and conservation partners, 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. 
This transaction elevates the concept of a “debt-for-nature” swap, given the size of the restructuring, the U.S. government backing (by the U.S. International Development Finance Corporation), and how it overcame the challenges of using collective action clauses to effect a cash take-out restructuring of a broadly held bond issuance. 
The nation worked closely with The Nature Conservancy and the U.S International Development Finance Corporation, which is providing $610 million in political risk insurance.
The S&C team that advised Belize includes Jim Bromley, Inosi Nyatta, Werner Ahlers, Chris Mann and Eric Kadel. Joe Neuhaus and Andrew Finn advised on arbitration and litigation matters. Eric Kadel and Adam Szubin advised on sanctions-related matters. Jeff Hochberg and Saul Brander advised on tax matters. Bob Risoleo, Rick Wertheim and Chris Mann advised on sovereign finance and other securities matters. Ari Blaut and Sarah Payne advised on opinion matters. Vanessa Blackmore and Kirsten Rodger advised on UK/EEA securities matters