Credit Suisse launched the Nature Conservation Notes in 2014 to provide market-rate returns while supporting sustainable agriculture and forest protection through investments in the Althelia Climate Fund and green bonds. The Notes offer a 6.5-year term with partial repayments after 3.5 years and exposure to a portfolio of high-quality green bonds alongside the Althelia Climate Fund's projects in countries like Brazil, Peru and Kenya. USAID provides a guarantee on up to 50% of potential losses from the Althelia Climate Fund. The document also outlines some other potential scalable instruments for mobilizing finance towards landscape initiatives and conservation.
1. Mobilizing Finance for Landscape
Initiatives: Three Scalable Instruments
CIFOR Global Landscapes Forum - Paris
December 6, 2015
John Tobin-de la Puente, CREDIT SUISSE
2. 2
The Nature Conservation Notes
Executive Summary
On December 11, 2014, Credit Suisse launched in collaboration with Althelia Ecosphere the Nature Conservation Notes, a new impact
investing product focused on sustainable agriculture and forest protection
The Notes build upon Credit Suisse’s strong commitment to the environment, the positive track record of the Local Currency
Microfinance Notes and the Education Note, as well as a thought-leadership research report co-authored by Credit Suisse, WWF, and
McKinsey on the topic of conservation finance
The Notes provide exposure to:
(i) Althelia Climate Fund, a unique Luxembourg-based fund focused on sustainable agro-forestry and ecosystem
conservation
(ii) Portfolio of selected green bonds with high credit quality
The Notes carry the following terms:
Expected market-rate return p.a. in EUR¹
Yearly repayments composed of (i.) Althelia Climate Fund’s dividends and (ii.) Green Bonds’ interests
6.5-year maturity with 60% of the initial investment expected to be repaid after 3.5 years
Secondary market (option to exit)
Sovereign guarantee (USAID) covering up to 50% loss on the Althelia Climate Fund
¹ The target return is not a projection, prediction or guarantee of future performance, and there is no certainty that the target return will be reached.
CREDIT SUISSE AG, Sustainability Affairs December 6, 2015
SUBSCRIPTION CLOSED – PRODUCT NOT FOR SALE
IN THE US
3. 3
The Nature Conservation Notes
Investment Mechanism
1 Investors were the purchaser of a Note. The Note was issued by a Credit Suisse-sponsored SPV that is also the limited partner into the Althelia Climate Fund.
Undrawn cash
(Collateral)
Investors1
SPV1
(Issuer)
Note
Investment
Althelia
Climate
Fund
Green
Bond
Portfolio
Bond 1
Bond 2
Bond 3
etc.Investments
Loans
10-15
projects in
total
Clients Nature Conservation Notes UnderlyingsInvestments
The Notes allow to support nature conservation in countries such as Brazil, Peru or Kenya and economic
development for its local communities through the revenues generated by the projects financed by the Fund
The undrawn cash of the Notes used as collateral against the Fund investment will be invested in a portfolio of
selected green bonds, providing a return enhancement and additional environmental impact to the Notes holder
SUBSCRIPTION CLOSED – PRODUCT NOT FOR SALE
IN THE US
CREDIT SUISSE AG, Sustainability Affairs December 6, 2015
4. 4
Illustrative Examples of Other Scalable Instruments
Ecosystem Green Bond
Asset-backed bond with use of
proceeds for self-sustaining cash-
flow generating conservation
finance and climate adaptation
activities in marine and land areas
Ocean Conservation Vehicle
Notes or fund to invest in
complementary strategies driving
ocean conservation by deploying
capital throughout the seafood supply
chain (e.g., quota, FIPs, processing)
Decoupled Impact Bond
Use of proceeds bond with principal
protection and fixed coupon by
issuer and PV coupon invested in a
portfolio of conservation finance
projects providing potential upside
CREDIT SUISSE AG, Sustainability Affairs December 6, 2015