Hunton Andrews Kurth Represents US International Development Finance Corporation on $656 Million in Political Risk Insurance for Largest Debt Conversion for Marine Conservation to Protect the Galápagos

Hunton Andrews Kurth LLP advised the U.S. International Development Finance Corporation (DFC) in connection with a $656 million Galápagos marine conservation-linked bond (the Galápagos Marine Bond) with the Government of Ecuador, Inter-American Development Bank (IDB), Credit Suisse, Oceans Finance Company (OFC) and the Pew Bertarelli Ocean Legacy. The issuance of the Galápagos Marine Bond closed May 9, 2023, and was used to finance a debt conversion, exchanging $1.628 billion of Ecuador’s international bonds for an $656 million loan.

Made possible through $656 million in political risk insurance provided by DFC, the debt conversion will allow Ecuador to realize more than $1.126 billion in lifetime savings through reduced debt service costs. During the next 18.5 years, it will generate approximately $323 million for marine conservation in the Galápagos Islands, with approximately $12.05 million of new funding annually and an approximate annual average of $5.41 million to fund an endowment for the Galapagos Life Fund (GLF). The endowment is expected to grow to more than $227 million by 2041 and will provide permanent funding for the GLF in support of marine conservation projects. The funds will also support research, the advancement of sustainable fisheries, climate resilience and the development a sustainable blue economy conducted by Ecuador-based organizations. The debt conversion and endowment is expected to generate more than $450 million in support of marine conservation in the Galápagos Islands.

“We were proud to represent DFC in the largest debt conversion for marine conservation to date,” said Jamie Head, partner and head of Hunton Andrews Kurth’s agency finance practice. “It was truly an honor to assist DFC’s committed public servants in this enormous achievement to protect the Galápagos Islands and its ecosystem.”

The Hunton Andrews Kurth team representing DFC was led by Head with assistance from partners Mayme Donohue and Jay Range (retired), counsel Patrick McDermott and associates Chloe Kwon and Ian Hutter.