Linklaters advises on first-of-its-kind Wildlife Conservation Bond
Linklaters has advised Credit Suisse and Citi on the World Bank's Wildlife Conservation Bond, the first-of-its-kind, outcome-based, financial instrument that channels private sector investments to achieve conservation outcomes.
Also known as the “Rhino Bond”, the USD150 million five-year bond issued by the International Bank for Reconstruction and Development (IBRD) will contribute to protecting and increasing black rhino populations in two protected areas in South Africa, the Addo Elephant National Park and the Great Fish River Nature Reserve.
Investors in the Rhino Bond will not receive coupon payments. Instead, IBRD will make conservation investment payments to finance rhino conservation activities at the two parks. If successful, as measured by the final rhino population growth rate, investors will receive a success payment at maturity, paid by IBRD with funds provided by a performance-based grant from the Global Environment Facility. Repayment of the bond principal is not conditional upon the rhino population growth rate. This represents a new approach in conservation financing that passes project implementation risks to capital markets investors and allows donors to pay for conservation outcomes.
Linklaters advised Credit Suisse as sole conservation bond structurer and both Credit Suisse and Citibank as joint bookrunner.
The Linklaters team was led by partner Elaine Keats and managing associate Sirae Chen.
Elaine Keats, commented:
“We were pleased to support Credit Suisse and Citi on this milestone transaction which looks to encourage change in conservation funding strategies, providing an innovative financing model for investors looking for a financial return while supporting global environmental concerns such as biodiversity conservation.”
Sirae Chen, commented:
“It is a real privilege to have worked on this innovative and ground-breaking transaction, which makes use of existing bond technology in a creative manner to address conservation and biodiversity issues.”
From debt and equity issues through to derivatives and structured finance, Linklaters’ market-leading capital markets practice advises on the full range of UK, US and domestic laws through its global team, combining technical expertise and a wealth of experience with regular contact with listing authorities and regulators. Recent deals include advising the Republic of Chile on ground-breaking sovereign sustainability-linked bond, three lenders on their investment into the Recovery Loan Fund and DekaBank on its first registered green bond on the blockchain.
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