06/11/2023: Ecuador launches debt buyback plan to protect Galapagos

This will free up money to protect the Galapagos Islands, one of the world's most valuable ecosystems and inspiration for Charles Darwin's theory of evolution (Photo: Parque Nacional Galápagos)

Ecuador has launched a long-awaited debt buyback plan. This will free up money to protect the Galapagos Islands, one of the world's most valuable ecosystems and inspiration for Charles Darwin's theory of evolution. The Swiss bank Credit Suisse on Wednesday (26th) made an offer to buy back three of the South American country's four most important government bonds for a total of $800 million, refinance them more cheaply and then use the saved funds for the Galapagos Islands. "The Vendor is making the offering... as part of a broader refinancing operation to channel savings and advance certain conservation and sustainability efforts," the buyback plan reads.

The move comes as Ecuadorian President Guillermo Lasso is struggling to survive politically, although troubles have pushed up the price of the bonds at the heart of the plan, maximizing potential benefits . If approved, the deal would be the largest debt swap, as such transactions are known in banking circles, on record, surpassing recent examples in Belize, Barbados and the Seychelles.

The Inter-American Development Bank and the U.S. International Development Finance Corporation is also said to be in talks to provide "loan guarantees," which are key to bringing down Ecuador's borrowing costs when it, as expected, issues new green "blue" bonds as part of the plan. Current bondholders have until May 4 to participate in the offering. Results of how many accepted the offer will be announced "as soon as possible" thereafter, and the transaction is expected to close on May 9th. (Source: latina-press.de)