• Credit Suisse has announced buying Ecuadorian bonds worth $1.6 billion (€1.45 billion) in a debt-for-nature swap that cost the Swiss bank just $644 million and in return, Ecuador’s government had pledged to spend about $18 million annually for two decades on conservation in the Galapagos Islands.
  • The Galápagos Islands are an archipelago of volcanic islands in the Eastern Pacific in South America.
  • They form the Galápagos Province of the Republic of Ecuador.
  • The Galápagos are famous for their large number of endemic species, which were studied by Charles Darwin in the 1830s and inspired his theory of evolution by means of natural selection.
  • The remote islands is home to some of the most unspoiled nature in the world.
  • These are a UNESCO world nature heritage site

What is the deal?

  • Credit Suisse will pay between 53.25% and 35.5% of the issue price for the 2030, 2035 and 2040 bonds.
  • A cheaper-to-service $656 million “Galapagos Bond” maturing in 2041 will replace the old debt.
  • That loan will also be partly underwritten where Credit Suisse’s risk is also contained.

The need:

  • The buyer, Credit Suisse, has recently been taken over by a Swiss banking giant.
  • The emergency takeover came in a bid to calm the financial markets amid a banking crisis.
  • The Zurich-based bank had been under pressure amid scandals that led to a large-scale withdrawl of funds from angry clients.
  • The seller, Ecuador, has been mired in a political crisis that triggered a slump in bond prices.
  • In 2022, Ecuador’s public debt amounted to around $66.68 billion.


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