Uruguay has issued the world’s first-ever sustainability-linked bond (SLB) with a two-way coupon step structure, penalising the sovereign if it fails to meet sustainability targets but also rewarding it if they are met. HSBC was joint sustainability structuring bank and bookrunner, as well as billing and delivery agent on a simultaneous switch tender.
Since the end of military rule some four decades ago, Uruguay has arguably become the most progressive state in South America. It has an admirable recent record in democracy, tolerance and economic freedom, and is the highest-ranking Latin American country (and 18th in the world) in the latest Corruption Perceptions Index, where higher is better.
