By Marc Jones
LONDON (Reuters) – 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 Ecuadorian President Guillermo Lasso fights for his political survival although in terms of financing it has reduced the price of the bonds at the centre of the plan to record low levels, maximising the potential benefit.
As long as the deal gets approved, it will be the biggest debt-for-nature swap, as these kinds of transactions are known in banking circle, struck to date, surpassing other recent examples in Belize, Barbados and Seychelles.
Bondholders have until May 4 to sign up to the deal with the results of how many took up the offer to be announced “as soon as reasonably practicable” after that date and the final “settlement” of the transaction due on May 9.
(Reporting by Marc Jones; Editing by Sandra Maler)
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