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Latham & Watkins Advises IDB in Historic Social Bond Offering by Ecuador

February 3, 2020
Republic of Ecuador is the first sovereign in the world to issue social bonds, intended to finance housing development.

Latham & Watkins advised the Inter-American Development Bank (IDB), as guarantor, in a US$400 million offering of social bonds issued by the Republic of Ecuador, the first sovereign in the world to conduct a financing of this kind. The offering, whose proceeds will help provide housing to medium- and low-income families by funding Ecuador’s housing program, complied with the Social Bond Principles of the International Capital Markets Association.

The IDB backed the bonds with a partial guarantee, making the operation highly attractive for international investors and significantly reducing the financing costs to Ecuador. Established in 1959, the IDB is the leading source of long-term financing for economic, social, and institutional developments in Latin America and the Caribbean. It also conducts cutting-edge research and provides policy advice, technical assistance, and training to public- and private-sector clients throughout the region.

Latham's Latin America team that advised the IDB in this ground-breaking offering was led by Project Development & Finance partner Paul Hunt and Capital Markets partner Roderick Branch, with associates Carlos Ardila and Maria Borges.

In 2019, Latham advised on more than 350 debt capital markets transactions worldwide, helping issuers raise more than US$320 billion. The offering by Ecuador and the IDB continues Latham’s long track record of innovation in the global debt and equity capital markets, which in Latin America includes serving as counsel on the first SPAC IPO in the region and the first energy IPO in Mexico.