The banner innovation is the inclusion of biodiversity KPIs. Chile’s latest bond is the first sovereign SLB aligned with the Global Biodiversity Framework’s 30x30 target, linking coupon outcomes to the expansion and management of protected terrestrial and inland water areas.
We review how the new targets interact with the bond’s payout profile and what this means in terms of option value.
We also reflect on bond structures that embed international commitments in bond structures. At some point, the currently used 2030 targets will no longer be fit for purpose and the market will have to pivot to 2035 targets.
