Design Grant Case Study: TLFF Inaugural Transaction: Corporate Sustainability Bond for Natural Rubber Production

In February 2018, TLFF completed its inaugural transaction, a landmark $95 million long-dated sustainability bond to finance sustainable natural rubber production across heavily degraded concession areas in the Jambi and East Kalimantan provinces. Michelin, the global tire manufacturer, will act as an off- taker of at least 75% of future production, and USAID’s Development Credit Authority (DCA) provided a partial credit guarantee. The transaction was Asia’s first corporate sustainability bond, with an innovative multi-tranche class structure that appeals to investors with diverse risk-return and tenor requirements.