Belize City, September 4, 2012
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Creditors question debt sustainability concerns

Belize City, September 4, 2012

In recent reports in the international media, Superbond creditors have questioned whether Belize has a need for debt sustainability. A source told Reuters News Agency that their analysis of the most recent economic review on Belize, the IMF’s Article IV consultation, cited no concerns over debt sustainability:

“In the absence of comprehensive and consistent information, we are relying on the IMF Article IV published last December. This report, which was issued in consultation with the Belize Government, did not even raise a concern about debt sustainability, so the committee is understandably curious about what has changed,” said the source.

There has been no response or clarification from the Barrow Administration through the Central Bank or Superbond team.

Creditors have also indicated that they are getting mixed signals from the Government of Belize. When they were approached initially, the Government claimed that it had to renegotiate the Superbond because of the debt incurred from its takeover of utility companies Belize Telemedia Limited and Belize Electricity Limited, but now the Government says the due compensation has nothing to do with it.

“In June, when it first released substantive information, [the government] pointed to the cost of the nationalizations as precipitating the need for a restructuring,” said the source from the credit committee. “However, in August, it said the nationalizations were not the reason. This is a critical issue and yet nothing has been made clear.”

Creditors have stated that they will boycott any talks until they get more information.

They have already rejected Belize’s terms of renegotiation which includes a 2% bond maturing in 2062 with no principal reduction and a 15-year grace period, a 45% reduction of principal with a 2042 maturity and a step-up coupon from 1% to 2% in 2019 and 4% in 2026, and a 3.5% coupon after a five-year grace period.

“We are in a period where parties are basically dancing,” said Carl Ross, the managing director at Oppenheimer & Co. “The government is sending the message that they don’t intend to improve terms in a significant way. Creditors are feeling that the government put more burden-sharing on the bond holders.”

http://www.belizetimes.bz/2012/09/07/creditors-question-debt-sustainability-concerns/

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Creditors question debt sustainability concerns

Belize City, September 4, 2012
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Belize City, September 4, 2012
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