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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