tag:blogger.com,1999:blog-5583736851165217706.post346752061954650134..comments2024-03-18T01:10:55.303-07:00Comments on Western Belize Happenings!: BELIZE BOND ISSUE 2029 coming up, no matter who runs the government, this year.Unknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5583736851165217706.post-46859672658680230292012-03-02T07:01:44.779-08:002012-03-02T07:01:44.779-08:00Beach Bum: as much as I enjoy your blog, you are s...Beach Bum: as much as I enjoy your blog, you are simply wrong about the Superbond. You write:<br /><br />"rather than the 25% return they are currently having to pay on the total value of bonds outstanding. "<br /><br />This is simply wrong.<br /><br />For the period 2012-2029 the Government of Belize is scheduled to pay 8.50% interest on the bonds outstanding. It is a fixed interest rate, not a variable one.<br /><br />The current price of the bonds doesn't increase or decrease what the government has to pay. The interest rate is always 8.50% for the period 2012-2029 on the amount outstanding.<br /><br />The maximum amount of money paid actually happens in 2019, as it is the full interest component plus the first scheduled amortization payment of 5% of outstanding bonds.<br /><br />From then on, for ten years until 2029, the amortization component is fixed at 5% every six months, and as a result the 8.50% interest paid starts DROPPING at 5% every six months, as you only pay interest on outstanding debt.<br /><br />The result is that for the period 2019 - 2029, every six months the GOB has to pay LESS than the previous six months due to the amortization of the bond.. This is a very important fact that many people ignore.<br /><br />This is why the Superbond actually improved the debt profiling of Belize.<br /><br />Before the Superbond, Belize also had external debt, but in the form of BULLET payments, which were due in TOTAL at maturity.<br /><br />The Superbond allows the Government to pay the external debt in 20 payments, one every 6 months, over a period of ten years, 2019 - 2029. Instead of one lump sum payment at the end. <br /><br />8.50% is not a high interest rate, regardless of the government's propaganda to misinform the people.Maria Mercedeshttps://www.blogger.com/profile/16824682790676720014noreply@blogger.com