BELIZE BONDS RAISE IRE OF CREDITORS.

5 year AUSTERITY BUDGET ANNOUNCED BY PRIME MINISTER.

 

$30 MILLION SHORT ON BALANCING THE BUDGET FOR 2012, SAYS THE PRIME MINISTER.

 

OBSERVERS SAY OIL EXPORTS EXPECTED TO CONTINUE DECLINE OVER NEXT FIVE YEARS, TO A TRICKLE, HAVING PAST PEAK OIL PRODUCTION IN BELIZE. 

 

 

 

Bond Holders Not Too Happy With Restructuring Of Superbond

A few weeks ago Moody’s Investors Service downgraded Belize’s credit rating sending it deeper into junk territory as it went from C-A-A-1 to C-A. It is the second time this year that Moody’s has cut Belize’s debt rating, citing a probable restriction of government’s $547 million bond and “weak economic growth”. When the downgrade was announced Prime Minister of Belize Dean Barrow was in Miami with his ailing wife. Upon his arrival in Belize last week Barrow was interviewed by the media and questioned about the downgrade and the superbond. During the interview Barrow mentioned that government could amend certain terms of the bond. Following that announcement Belize’s bondholders formed a creditors committee out of concern that the country could become the next sovereign to default on its debts, according to the Financial Times.

The ad hoc committee represents holders of more than $200 million of the $547 million bond due in 2029. In the release creditors indicate that while they are sympathetic to the challenges facing Belize, any proposed amendment that results in a net present value or principal loss to creditors would not, based on the committee’s current understanding of the situation in Belize, be considered acceptable or, for that matter, necessary. How the recently formed committee will impact the present negotiations of the superbond is left to be seen. But the news forthcoming doesn’t seem to be all that good.

Belize’s creditors committee is advised by BroadSpan Capital, a Latin America-focused investment banking boutique that also advised international creditors to Saint Kitts and Nevis, the Caribbean island federation, in debt restructuring this year.