2026 Perspectives for the Public Sector

Citi’s Unique Positioning: Bridging Capital Markets and Sustainable Development The innovations observed in the recent wave of debt conversions underscore a fundamental truth: these structures are not merely financial engineering exercises but demand a holistic skill set that few institutions possess. They require: • Deep capital markets knowledge to navigate secondary debt markets, understand investor appetite, structure new bond issuances and maximize the benefits of liability management exercises. • Specialized structuring expertise to design bespoke financial instruments, create robust legal frameworks (including SPVs), and integrate various credit enhancement layers. • Strategic partnerships with multilateral development banks and private insurance to leverage their credit enhancement capabilities, policy expertise, and convening power. Citi is uniquely well-placed to support sovereigns in the design and execution of debt conversions. Citi’s Public Sector franchise brings unparalleled structuring expertise derived from (i) decades of working with sovereign entities globally on debt sustainability and economic development matters, and (ii) strong, enduring relationships with MDBs, which are critical for orchestrating the complex interplay of guarantees, insurance, and policy support for these transactions. The broader Citi team provides the capabilities essential for these multi-faceted transactions, including: • Global Capital Markets: Providing access to deep pools of institutional investors and leading expertise in bond issuance and liability management across emerging markets. • Risk Management: Offering sophisticated analytics and strategies to assess and mitigate the inherent risks in sovereign debt and project finance. • Environmental, Social, and Governance (ESG) Expertise: Guiding the integration of sustainability criteria into transaction design and ensuring alignment with international best practices for impact measurement. • Legal and Regulatory Acumen: Navigating the complex legal and regulatory landscapes across jurisdictions involved in these multi-party deals. • Global network: Bringing an extensive set of relationships with NGOs, financial institutions and corporates that could potentially participate in these structures. This comprehensive in-house capability enables Citi to act as a singular, end-to-end partner for sovereigns, facilitating the entire lifecycle of a debt conversion, from initial concept and structuring to execution and ongoing advisory. 22 HowDebt Conversions are Evolving with the Times