Thursday, November 29, 2012

BELIZE OFFICIALLY DEFAULTS ON COMMERCIAL FOREIGN BOND DEBTS

BELIZE OFFICIALLY DEFAULTS ON SUPERBOND GROUP OF DEBTS WITH COMMERCIAL PREDATORY LENDERS.

  

Belize Rejects Restructuring Offer on $544 Million Superbond

Belize rejected a debt restructuring proposal by creditors holding more than half of a $544 million defaulted bond three months after the government missed a coupon payment.
Belize rejected the bondholders’ Nov. 21 restructuring proposal, which is “wholly incompatible” with the country’s objective to make its debt sustainable, according to a statement posted on the central bank’s website today. The Central American country paid creditors $11.7 million on Sept. 20, about half of the $23 million coupon payment it failed to make Aug. 20.
“The government views the recently-submitted scenarios as unsustainable, and is disappointed that a counter-proposal of this nature has come five months after discussions with the Committee began,” according to the statement.
In response to the bondholders’ proposal, Belize countered with two debt restructuring scenarios. Belize’s counter proposals would reduce the coupon rate payment on the so-called superbond and provide a grace period of five to 10 years. The government said it will seek feedback from bondholders’ on the presented scenarios and “remain open to discussing alternative structures.”
“It seems like bondholders and the government still remain far apart with regards to acceptable terms,” said Joe Kogan, head of emerging-market strategy at Scotia Capital Markets. “The government has revised some assumptions and improved on its previous offer. That previous offer was very aggressive, however, and Belize’s growth of 7.4 percent in the first half of 2012 makes it even harder for Belize to justify the haircut they were requesting.”
To contact the reporter on this story: Adam Williams in San Jose, Costa Rica at awilliams111@bloomberg.net
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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