-- UBS Group AG is working on its first-ever ESG debt swap, building on expertise it inherited from Credit Suisse after taking over the bank last year.UBS will form part of a consortium of firms working to raise funds for a $300 million refinancing arrangement for Barbados that will help fund climate-resilient infrastructure, according to a person familiar with the matter who asked not to be identified discussing private talks.
Though still a niche market, some of the world’s biggest banks have shown interest in getting a foothold. Bloomberg previously reported that lenders exploring debt-for-nature swaps include Goldman Sachs Group Inc, HSBC Holdings Plc, Standard Chartered Plc and Citigroup Inc. Last year, Bank of America Corp. struck its first deal with a $500 million swap for Gabon.
Barbados has about $2 billion in local currency and dollar-denominated bonds outstanding, including a $530 million dollar bond due in 2029, according to data compiled by Bloomberg. It’s unclear which debt the country is targeting for the buyback. Barbados is targeting savings of up to $130 million over 15 years, Espinosa said. Part of that will be used to service a new $40 million loan from the United Nations Green Climate Fund and another $60 million loan from IDB that, together with a $60 million grant from the GCF, will fund the sewage plant upgrade, he said. The remaining $30 million will be used to finance ancillary water security projects.