TheNatureConservancyCase StudyBARBADOS BLUE BONDS FOROCEAN CONSERVATIONExecutive SummaryTransaction HighlightsIn September 2022,the Government of BarbadosKeyBarbados repurchased:(GoB),The Nature Conservancy (TNC),and the Inter-TransactionUSD 77.6 million of its 6.5%2029American Development Bank(IDB)announced theComponentsEurobond at a price of 92.25 cents oncompletion of a USD 150 million debt conversion thatthe dollar andcreated long-term sustainable financing for marineUSD 72.9 million (BBD 145.9 million)conservation and secured a GoB commitment to protect upof its 8%Domestic Bond Series Eto 30%,or -55,000 square km,of its Exclusive Economicat par.Zone (EEZ)and Territorial Sea.This project will facilitateBarbados'commitment to the United Nations GlobalCredit Suisse and CIBC FirstCaribbeanarranged a 15-year amortizing Blue LoanBiodiversity Framework,which aims to protect 30%of theof USD 146.5 million (50%in USD andworld's land,ocean,and inland waters by 203050%in BBD).The transaction,as part of TNC's Blue Bonds for OceanIDB (USD 100 million)and TNC (USDConservation Program,enabled Barbados to replace50 million)co-guaranteed the Blue Loancovering outstanding principal onerelatively expensive pre-existing debt (7.2%average cost)semiannual coupon.with significantly lower all-in cost of financing (4.9%).This debt repurchase was funded by new financingBarbados committed to binding marine(the "Blue Loan")arranged by Credit Suisse and CIBCconservation targets and directing 100%of the debt service savings towardsFirstCaribbean in USD (50%)and Barbadian Dollarsconservation over 15 years.(BBD)(50%),and co-guaranteed by IDB and TNC.Thenet savings will allow Barbados to channel an estimatedUSD 50 million into conservation funding over 15 years:KeyAspirational goal of 30%of ocean areaUSD 23 million into an independent conservation fund,Conservationunder protection by 2030,half in high-the Barbados Environmental Sustainability Fund (BESF)(USDprotection biodiversity zones.1.5 million per year on average),and USD 17 millionScience-based,participatory,andtowards a long-term endowment for BESF,which isinclusive Marine Spatial Planning toexpected to generate an additional USD 10 million ofidentify new protected areas and developreturns over 15 years.an ocean management plan.Creation and funding of the BarbadosThe project incorporates ocean conservation commitmentsincluding developing a transparent,participatory,andcollaborative Marine Spatial Plan (MSP)that is guided byto disburse grants to conservationthe best available science,data,and information;anpractitioners in Barbadosaspirational goal to protect 30%of the country's oceanby 2030;and the establishment of BESF to allocateconservation funding in Barbados through a grants programKeyUSD 1.5 million per year (on average)intoaligned with national conservation,environmental,andConservationBESF for grant fundingsustainable development priorities.TNC will support theseFundingUSD 17 million endowment to grow toactivities with technical assistance.USD 27 million (est.)by 2037.Blue LoanPrincipal:USD 146.5 millionFinanceDebt stock reduction:USD 4.1 millionBond AwardsInterest Rate:3.8%2023Maturity:2037(9.3 WAL)All-in cost:4.9%(inclusive of guaranteefees +TNC Conservation Advisory,IFRMonitoring,and Reporting Cost Recovery)Option to defer up to 2 years of principalAWARDSpayments following a Natural Disaster or2022a Pandemic EventCASE STUDY:BARBADOS BLUE BOND FOR OCEAN