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Sovereigns and central banks

New biodiversity SLB underpins Chile’s leading role

Written by Jonas David

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Chile has announced a new 10-year sustainability-linked bond (SLB), reinforcing its position as a leading sovereign issuer in ESG-labelled debt. We assess the bond’s structure, analyse its pricing, and discuss key consideration for investors.

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. 

About the author

Jonas David

Jonas David

Research Director

Based in London, Jonas researches the role of fixed income markets in the climate transition, focusing on key sectors, sovereigns and development finance. He previously worked in emerging markets fixed income at Morgan Stanley Investment Management and UBS.

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