b'Conversionfor ConservationWe advised the United States Internationalmade for conservation in a debt conver-Development Finance Corporation (DFC),sion transaction. This type of debt conver-the U.S. Governments international devel- sion provides an attractive alternative to opment bank, as political risk insurer inmore traditional financing transactions connection with a $1 billion conversionas means by which sovereigns can refi-for conservation financing for El Salvador.nance their debt, while making an import-The transaction involved the repurchase ofant impact.$1.031 billion of its outstanding bonds at dis- They also can be said to be a next gen-count from par. This is, to date, the worldseration in a long tradition of sovereign debt largest conservation-focused transactionconversions. Many debt capital markets of this kind and the largest for river conser- products used in other industry sectors vation. J.P. Morgan provided the $1 billioncan be redeployed successfully and used loan and acted as arranger and dealer man- for sovereigns. This has been in evidence ager. The transaction involved the issuanceduring 2025 when sovereigns have turned by El Salvador of 20-year impact notes, andto P-CAPs (or pre-capitalized securities), a concurrent tender offer. The impact notesfor example, long an insurance product, were purchased by a special purpose vehicleas a funding tool. The IFLR recognized the (SPV) using loan proceeds. This series oftransaction as the Debt and Equity-Linked transactions allows for the refinancing ofDeal of the Year at its 2025 IFLR Americas outstanding debt and the reduction in debtAwards, for the technicality and innovation servicing costs. Credit enhancement, whichof the deal and of its role in lasting conser-contributed to lowering funding costs, wasvation commitments. achieved through political risk insurance in favor of the SPV and provided by the DFC, and a $200 million standby letter of credit that was provided by the Development Bank of Latin America and the Caribbean (CAF), a regional development bank. Of the expected nearly $352 million in notional debt savings and the reduction in debt service costs, $350 million will be appliedtotheRioLempaConservation andRestorationProgram.Theprojects that are expected to be funded by the sav-ings are designed to enhance water qual-ity,quantityandreliability,aswellas, amongotherthings,mitigateregional watersecurityrisk.Thisisthelargest funding commitment a country has ever7'