Year: 2022

Winner: Belize Blue Bonds for Ocean Conservation

Belize may be the smallest country in the continental Americas, but it made an enormous
splash in the market with a debt-for-conservation swap that has contributed to its dramatic
financial turnaround.
The November 2021 transaction, known as the Blue Bond for Ocean Conservation, not only
restructured $553 million in Belize’s debt, but created avenues for protecting and enhancing its
rich biodiversity, which is the backbone of its tourism industry, and inaugurated creative
structures that could be used by similar economies straddled with debt.
The scope of the deal, with so many innovative features, won Belize the award for Sovereign
Restructuring of the Year.
Economic Development Minister Christopher Coye says the restructuring “played a significant
part in how we turned around our economy and contributed to the development path that we
are on today.”
Coye says it is important to understand the before and after of the restructuring. The “before”
was a dramatic situation. Belize was in a recession when the pandemic hit, and things got much
worse quickly.
According to the International Monetary Fund (IMF), the economy contracted by 16.7% in
2020 and the deficit ballooned to 11% of GDP. The external debt, which was already high,
jumped from 68% to an even more unsustainable 91.7% of GDP. Total debt jumped to 133%,
according to the IMF. Unemployment increased to 30% in a country of only 430,000 people.
Prime Minister John Briceño’s government took over in the middle of the debacle in November
2020 and had to act fast.
“We came into government in a crisis mode and had to make tough decisions. We cut salaries
by 10% and slashed expenditures on goods and services by 25%. At the same time, we had to
look for a way to renegotiate our significant debt,” says Coye.
The government began talking to creditors and the IMF about a traditional debt restructuring,
while simultaneously working with The Natural Conservancy (TNC) on a plan that would not
only lower the debt but help Belize protect 30% of its ocean; ocean-based tourism is the
country’s economic bread and butter.
The deal, which the parties kept under wraps, took 11 months to finalize and was
groundbreaking on many fronts. Credit Suisse and Citi structured the financing, while the IMF signed off on the agreement, to the approval of creditors.

The transaction, equivalent to 30% of the country’s GDP, involved a $364 million bond that
allowed Belize to restructure $553 million by buying back debt at a discounted rate. The
government committed to investing $4 million annually for 20 years on marine conservation
and to increase the amount of ocean under protection from 15.9% in 2021 to 30 percent by
The debt deal, together with economic policies adopted by the Briceño government, worked to
stop the hemorrhaging. External debt fell to 74.4% of GDP in 2021 and the economy
expanded by double digits, according to Coye.
“Belize put itself on the map with its blue bond and its prudent fiscal approach,” says Coye.
Of the different pieces involved in the transaction, Coye highlights the role of the U.S.
government’s International Development Finance Corporation (DFC), which basically acted as
an insurance policy.
“For small countries likes Belize, exposed to climate risk and other factors, there is a higher
perception of risk, so if we are looking to attract private capital we need solutions that look to
reduce the perception of risk,” says Coye.
This is where DFC was brought in to guarantee the debt. “The DFC participation basically
converted Belize risk into U.S. government risk and we ended up with a AA investment grade
rating,” Coye says.
Luigi Wewege, president of Belize’s Caye International Bank, says the deal would have a longterm impact for the country.
“The blue bond has been successful from different perspectives. It fits perfectly into an ESG
portfolio, as well as having a significant impact on the Belizean national debt and its
macroeconomic outlook,” Wewege says. LF

Blue Bond Arranger: Credit Suisse
Financial Advisor to Belize: Citi
Strategic Partner: The Nature Conservancy (TNC)
Domestic Financial Advisor to Belize / Lead Negotiator: HallMark Advisory Ltd
Legal Advisors to TNC: Barrow & Co; DLA Piper; Ropes & Gray; Shearman & Sterling
Legal Advisors to Issuer: Sullivan & Cromwell; Lee Buchheit
Legal Advisors to Banks: Allen & Overy (CS); Davis Polk & Wardell (Citi)

All supporting financial institutions and law firms were transmitted to LatinFinance by the
award category winners. For updates please email