Clifford Chance advises Credit Suisse and CIBC FirstCaribbean on innovative debt conversion for Barbados

Global law company Clifford Probability advised Credit score Suisse and CIBC FirstCaribbean (“CIBC”) on an innovative financial debt conversion transaction for Barbados, which was announced by Barbados and The Nature Conservancy (“TNC”), who furnished conservation advisory services and a secondary assurance for the transaction.

The transaction included Credit rating Suisse (by using an SPV) and CIBC giving US Dollar and Barbados Greenback time period amenities (the “Amenities“) to Barbados, which are assured by the Inter-American Development Financial institution (“IDB“) and TNC, with Barbados applying the proceeds to purchase again particular global and neighborhood bonds in the market place.

Barbados will direct the fiscal cost savings resulting from the personal debt conversion, understood by way of lessen financial debt provider payments on the Facilities when compared to the bought again bonds, to the Barbados Environmental Sustainability Fund (“BESF“) via a Conservation Funding Settlement. The BESF, which is envisioned to obtain roughly USD 50m over the future 15 years, will fund maritime conservation and other environmental and sustainable progress jobs in Barbados. Alongside the funding, Barbados will commit to a amount of conservation commitments, such as to shield and sustainably manage up to 30% of its Exclusive Financial Zone and Territorial Sea – an spot of a lot more than 55,000 square kilometres.

A exclusive ingredient of the Amenities is that it incorporates a new growth in financial debt sustainability, developing upon the framework that Barbados has championed and pioneered by way of climate resilient credit card debt devices, by incorporating an alternative to briefly suspend financial debt servicing in case of a foreseeable future pandemic (in addition to subsequent the event of a organic catastrophe).

Clifford Likelihood also recommended Credit rating Suisse on a simultaneous repackaging of the USD tranche of the Amenities into two sequence of Blue Bonds.

The thriving execution of the offer adds to Clifford Chance’s established monitor document of advising consumers on reducing edge ESG and blended finance transactions for sovereigns.

Clifford Opportunity companion Deborah Zandstra, who led on the transaction, explained “We are delighted to have labored on this landmark debt conversion transaction, which harnesses credit card debt conversion procedures and blended finance to aid maritime conservation goals even though embedding pandemic with local weather resilient characteristics for the very first time in these types of a transaction.”

Deborah Zandstra was assisted by main group Azam Taiyeb, James Kelton, Amy Hillier and trainees Philipp Ershov and Caroline Smyth.

The team were more assisted by lawyers throughout the Clifford Chance network, together with Jessica Littlewood, Audley Sheppard KC, Jon Zonis, Avrohom Gelber and Jemma Dick.