Ecuador launches debt buyback plan for Galapagos protection
In this April 14, 2021 file photo, marine iguanas bask in the sun at Galapagos National Park in Puerto Ayora, Santa Cruz Island, in the Galapagos Islands, some 900 km off the coast of Ecuador in the Pacific Ocean. (PHOTO / AFP)
LONDON – Ecuador has launched a long-awaited debt buyback plan that will free up money to protect its Galapagos Islands, one of the world's most precious ecosystems and the inspiration for Charles Darwin's Theory of Evolution.
Ecuador's bankers, Credit Suisse, laid out the offer on Wednesday to buy back three of the country's four main government bonds for a total of $800 million, refinance them more cheaply and then funnel the savings into the Galapagos.
"The Offeror is making the Offer… as part of a broader refinancing operation to channel savings and promote certain conservation and sustainability efforts," the buyback plan said.
The move comes as Ecuadorean President Guillermo Lasso fights for his political survival, although in terms of the deal, the problems have hammered the price of the bonds at the center of the plan, maximizing the potential benefit
The move comes as Ecuadorean President Guillermo Lasso fights for his political survival, although in terms of the deal, the problems have hammered the price of the bonds at the center of the plan, maximizing the potential benefit.
If the deal is approved, it will be the biggest debt-for-nature swap, as such transactions are known in banking circles, struck to date, surpassing other recent examples in Belize, Barbados and Seychelles.
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Quito refused to provide further details, but sources told Reuters last year when the plans were taking shape that the US-based Pew Charitable Trusts, a co-founder of the ocean conservation Blue Nature Alliance, had been lined up to provide money for initial the buyback.
In this April 15, 2021 file photo, young giant tortoises are seen at a breeding center of Galapagos National Park in Puerto Ayora, Santa Cruz Island, in the Galapagos Islands, some 900 km off the coast of Ecuador in the Pacific Ocean. (PHOTO / AFP)
The Inter-American Development Bank and US International Development Finance Corporation were also said to be in talks to give "credit guarantees", crucial for bringing down Ecuador's borrowing costs if, as expected, it issues new eco-friendly "blue" bonds as part of plan.
Pew and the banks did not respond to requests for comment.
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Holders of its current bonds, meanwhile, have until May 4 to sign up to the deal. The results of how many took up the offer will be announced "as soon as reasonably practicable" afterwards and "settlement" of the transaction is due on May 9.
source https://eastmud.com/latest-news/ecuador-launches-debt-buyback-plan-for-galapagos-protection/