S&P says Belize ratings unchanged after partial coupon payment

Standard & Poor's Ratings Services today said its 'SD' foreign currency ratings on Belize and its 'D' rating on Belize's bond due in 2029 remain unchanged following the government's partial payment of $11.7 million on Sept. 20. The government of Belize missed an approximately $23 million coupon payment due on Aug. 20, 2012. Although the terms of the 2029 bond include a 30-day grace period for interest payments, our ratings speak to full and timely payment. They also address debt exchanges that we view as distressed. By either measure, the government remains in default, based on our criteria. Rescheduling negotiations between the government of Belize and holders of the $547 million bond due in 2029 are ongoing. Once the likely rescheduling terms become clearer, we will publish our expectations for a postdefault foreign currency rating. Of the rated sovereigns that have emerged from default during the past 15 years, postdefault ratings typically have ranged from 'CCC' to 'B'.

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Belize wins 60-day reprieve after partial payment
Debt-burdened Caribbean nation Belize has won a 60-day reprieve from bondholders after paying a portion of its overdue US$23m debt interest. It paid US$11.7m to creditors, earning it some breathing space and reducing the likelihood of a full-blown default, the BBC reported yesterday. Belize had been due to pay the US$23m bond interest payment, or coupon, on August 20.

A 30-day grace period to "cure" the missed payment ran out late on Wednesday, September 19. After the grace period ran out only 25 per cent of bondholders could have voted to accelerate the repayment of the entire bond, which was supposed to mature in 2029, according to a Financial Times report.

In return for Belize making a partial payment, the creditors' committee-chaired by AJ Mediratta, a partner of US hedge fund Greylock Capital Management-agreed not to seek "legal remedies" for a further 60 days to allow restructuring talks to continue. Negotiations are continuing.