The nature conservancy is the broker here between Belize and Credit Suisse. Critically important to this deal was a kind of insurance policy from the US International Development Finance Corporation which effectively de-risked the deal for investors. The bond that Belize had out was not doing well they bought it back Credit Suisse then in partnership with the nature conservancy cut their debt and reissued it for others to buy.
There’s a new way for some countries struggling under piles of debt to get relief: by agreeing to spend part of the difference on the environment. The Nature Conservancy, the US-based environmental group, is teaming up with big financial institutions to offer what’s called Blue Bonds, or debt-for-nature swaps. The bank alleviates some of the country’s debt burden, and the government puts the savings toward restoring coral reefs and other environmental projects. Belize and the Seychelles are among a handful of nations that have taken the offer so far, and many more are in the works.
Bloomberg journalists Sydney Maki and Natasha White join this episode to explain how these complex deals work–and who’s profiting from the bargain.
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