BUSTAMANTE FABARA highlights the announcement by the Republic of Ecuador today of a new debt-for-nature swap transaction, this time to support the conservation of terrestrial and freshwater ecosystems in the Amazon.This was facilitated by The Nature Conservancy’s (TNC) innovative Nature Bonds Program and supported by the U.S. International Development Finance Corporation (DFC), the Inter-American Development Bank (IDB), and Bank of America. This program will enhance the protection of Ecuador’s Amazon region, conserving vital ecosystems while supporting local communities.

The innovative debt swap was enabled by USD 1 billion loan to repurchase and retire prior Ecuadorian sovereign debt represented by bonds with a nominal value of USD 1.527 billion, an operation expected to unlock USD 460 million over the next 17 years for the conservation of terrestrial and freshwater ecosystems in Ecuador’s Amazon. This is the largest amount of conservation funds unlocked through a debt conversion to date. This initiative is also the largest so far under TNC’s Nature Bonds Program. The new financing also involves more favorable terms, generating a debt principal reduction of USD 527 million and fiscal relief on debt servicing of over USD 800 million over the next 11 years (until 2035). Bank of America acted as the structuring and placement agent for the issuance and the sole manager of the tender process.

The Role of BUSTAMANTE FABARA

BUSTAMANTE FABARA provided local legal advice to two key parties in the transaction, leveraging its expertise in complex transactions, particularly in Debt Swaps, through two independent teams:

  • Bank of America: Team led by Partner Diego Ramírez, supported by Senior Associates James Keeble and Nathaly Villasís. This is the same team that advised on the Galápagos Debt-for-Nature Swap.
  • The Nature Conservancy: Team led by Partner Jesús Beltrán, supported by Partner Rafael Valdivieso, along with Director Patricio Santos and Senior Associate Bruno Pesantes, advised TNC.

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