Pellerano Nadal Advises on Historic Sovereign Green Bond Issuance and Successful Bond Tender Offer by the Dominican Republic
July 9, 2024
Pellerano Nadal proudly served as Dominican legal counsel to Citi and JPMorgan as dealer managers, bookrunners and initial purchasers in the landmark liability management and new bond issuances by the Dominican Republic. This significant transaction marks a milestone in the country's financial strategy and commitment to sustainable development.
The Dominican Republic announced the commencement of an offer to purchase outstanding 2025 bonds for cash on June 17, 2024. The offer, which expired on June 25, 2024, resulted in US$1,009,904,000 in validly tendered bonds, with settlement occurring on July 1, 2024.
In a historic move, the Dominican Republic also issued its first sovereign green bonds, amounting to US$750 million at a rate of 6.600%. The new 12-year green bonds, under the country's Green, Social, and Sustainable Bonds Framework, align with the National Development Strategy 2030 and form part of the 2024-2028 debt strategy. The proceeds from this issuance will support sustainable projects in clean energy, transportation, waste management, and more.
In addition to the green bond issuance, the Dominican Republic raised an additional US$2.27 billion in the international market. This included DOP105 billion (US$1.77 billion) worth of 12-year bonds in Dominican pesos at rate of 10.750% and an additional US$500 million to its 7.050% 2031 US dollar-denominated notes.
The issuance was well-received, with demand from foreign investors six times the amount sought, reflecting confidence in the Dominican Republic’s economy and its commitment to sustainability. The Dominican Republic's Ministry of Finance highlighted the importance of this transaction in promoting environmental and social benefits, as well as its commitment to transparency in public debt management and diversification of the investor base.
The Pellerano Nadal team that participated in this transaction included: Luis Rafael Pellerano (Managing Partner), Marielle Garrigó (Partner), Ricardo Pellerano Nadal (Senior Advisor) and Eduardo Pellerano (Senior Associate). Simpson Thacher & Bartlett LLP acted as New York counsel to Citi and JPMorgan, while Cleary Gottlieb Steen & Hamilton LLP acted as New York counsel to the Dominican Republic.