Belize Bond 2038; the newly minted superbond

The much condemned and now newly minted super-bond is now the Belize Bond 2038, a done deal with a majority of bondholders signing on and the balance will follow suit under a collective action clause. The numbers have been thrown about since last week, but today Prime Minister Dean Barrow was all smiles as he called the occasion reason for celebration. The stakeholders in the restructuring process were on hand for that celebration and freelance reporter Mike Rudon has the story from the Biltmore Plaza.

Prime Minister Dean Barrow

“The gross debt relief attained in 2012/2013 and the coming five and ten year periods; you will say in 2012, it is twenty-two million, 2013 sixty-six, 2013-2017 two thirty-six, 2013-2022 four ninety-four.”

Mike Rudon, Reporting

That’s four hundred and ninety four million Belize dollars, which the Prime Minister says will be saved between 2013 and 2022 because of the restructured bond. And that restructuring will have all sorts of positive spinoffs, according to the PM, including an unprecedented debt to GDP ratio.

Dean Barrow

Dean Barrow

“There is a possibility that with a little bit of luck and the kind of growth that we saw last year being replicated by and large, we can actually see Belize’s debt to GDP ratio fall to perhaps sixty percent by 2017. That of course is debt heaven at least in terms of the internationally accepted benchmarks.”

The Prime Minister makes much of the fact that the restructuring was done in a timely fashion, and much of the fact that they did so while resisting the demands by creditors.

Dean Barrow

“We do make much of the fact that we were able to resist those demands; no GDP warrants, no oil warrants, no consent fee, no funded trustee indemnification. We paid committee expenses of one point five million when in fact the demand we had been faced with initially was for three point five to four million. Perhaps most important of all, the accrued interest—remember we didn’t pay the coupon payment that had become due in August, we did not pay the coupon payment that had become due in February—and so that all together these are rolled up into the new bond and we thereby save seventy-six point four million dollars by way of these cash payments forgone. There is a point to be made. I think our financing gap at this year FS is eighty-four million. If we had not succeeded, you would have had to add that seventy-six point four million to the eighty-four million and of course that would have meant that we would no doubt have gone over the fiscal cliff.”

Mike Rudon for News Five.

http://edition.channel5belize.com/archives/83089