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#213305 - 08/03/06 12:00 AM Belize Announces Impending Debt Rearrangement
Marty Offline
Press Release Source: Ministry of Finance, Government of Belize

Belize Announces Impending Debt Rearrangement
Wednesday August 2, 7:02 pm ET


BELMOPAN, Belize, Aug. 2 /PRNewswire/ -- The Government of Belize announced today its decision to seek the cooperation of the country's private sector creditors in a rearrangement of Belize's approximately US$960 million external debt stock. The Government expects that most of the external commercial debts of Belize and its public sector entities will be affected by this debt rearrangement. The Government of Belize is simultaneously approaching its official-sector creditors to solicit their assistance in addressing the country's currently unsustainable debt burden.
In October 2004, the Government of Belize began implementing a significant tightening of fiscal policy. This tightening has seen a major reduction in capital expenditure and expansion in Government revenue. As a result, the country's overall deficit has declined from over 8% of GDP in fiscal year 2004/2005 to 3.1% in fiscal year 2005/2006. The budget enacted earlier this year for fiscal year 2006/2007 is also very tight and is expected to reduce the deficit even further.

In this same period, the Central Bank tightened liquidity in the banking system on three separate occasions in order to dampen the demand for foreign exchange and thereby ease the pressure on the balance of payments.

Even with these belt-tightening measures, however, Belize is projecting significant fiscal deficits over the medium term. Considerable shortfalls in the balance-of-payments are also expected to persist, exacerbated by Belize's very low level of international monetary reserves. Belize's ratio of debt to GDP is just over 90%. The country spends -- on interest payments alone -- more than 27% of the Government's fiscal revenue.

"Servicing of the Belizean external public sector debt stock on its existing terms is no longer a viable option," said Said Musa, Prime Minister and Minister of Finance of Belize. "We must urgently ask the cooperation of our creditors to help put this debt stock on a sustainable financial footing."

Belize has retained Houlihan Lokey Howard & Zukin as financial adviser, and in this role, the firm will be assisting the Government in its consultations with the affected creditors. Those consultations will commence immediately. Belize would like to conclude the debt rearrangement by the fourth quarter of 2006.


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Source: Ministry of Finance, Government of Belize

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#213306 - 08/03/06 02:39 AM Re: Belize Announces Impending Debt Rearrangement
Marty Offline
Debt default not an option for Belize--policymaker

GUATEMALA CITY, Aug 2 (Reuters) - One of Belize's top financial policy makers said that default was not an option for the tiny Central American nation, which earlier on Wednesday announced it was restructuring its foreign debt load.

"I really don't see default as an option for Belize," said health minister Jose Coye, one of the six members of the country's finance advisory committee, in a telephone interview with Reuters.

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#213307 - 08/03/06 04:36 AM Re: Belize Announces Impending Debt Rearrangement
Marty Offline
Government admits it canít pay its debts
That Belize is in a whole heap of financial trouble is hardly news ... but when Belmopan issues a press release admitting that it cannot pay its debts and will go hat in hand to its creditors ... well, we better sit up and listen. Today's release from the Ministry of Finance comes on the heels of Prime Minister Said Musa's trip to Washington D.C., where in the company of advisors from the firm of Houlihan, Lokey, Howard & Zukin, he met with the Interamerican Development Bank and a number of other international financial institutions. Apparently, the message from Washington was that it's time to negotiate. According to today's release, Government will ask the cooperation of the country's private sector lenders in what they are calling a "rearrangement" of the nearly one billion U.S. dollars in external debt. At the same time G.O.B. will approach its public sector creditors for additional assistance to address (quote) "the country's currently unsustainable debt burden." Reversing field after several years of assuring that all was well on the financial front, the P.M. is essentially throwing in the towel. "Servicing of the Belizean external public sector debt stock on its existing terms is no longer a viable option," says Musa, "we must urgently ask the cooperation of our creditors to help put this debt stock on a sustainable financial footing." The release, which appears to be directed primarily to a foreign audience, says that consultations with creditors will commence immediately in the hope of coming to satisfactory terms by the end of the year.

http://new.channel5belize.com/archive_detail_story.php?story_id=16746

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#213308 - 08/04/06 05:01 PM Re: Belize Announces Impending Debt Rearrangement
Loansum-Al K Offline
Marty, what affect if any will this debt situation have on the Belize banks. Should I be concerned about my deposits?
_________________________
I'm happier than a pig in s__t...a foot on the sand...and a Belikin in my hand!

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#213309 - 08/05/06 12:52 AM Re: Belize Announces Impending Debt Rearrangement
Anonymous
Is it naive to suggest that corruption at Government level has played a significant part in generating this situation?

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#213310 - 08/05/06 02:57 AM Re: Belize Announces Impending Debt Rearrangement
Loansum-Al K Offline
pedro2, are you addressing my post or just making a general statement regarding Marty's post?
_________________________
I'm happier than a pig in s__t...a foot on the sand...and a Belikin in my hand!

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#213311 - 08/06/06 02:03 AM Re: Belize Announces Impending Debt Rearrangement
GBZ39 Offline
Pedro...you must be naive to even consider corruption might be involved.

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#213312 - 08/08/06 11:07 PM Re: Belize Announces Impending Debt Rearrangement
Marty Offline
Belize Spending Increases May Lead to Debt Default, S&P Says
Aug. 8 (Bloomberg) -- Belize's increased spending on infrastructure and on recovery efforts after hurricane damage may lead the Central American country to default on its debt, according to Standard & Poor's.

``The government came in with the idea to jumpstart the economy with a lot of infrastructure projects that caused their deficit and debt levels to rise,'' Richard Francis, an analyst at S&P in New York, said in a telephone interview.

S&P cut the credit rating for Belize, a nation that borders Mexico and Guatemala, on Aug. 4 to CC, leaving it two levels above a default rating. The government on Aug. 2 said it would seek to restructure some of its international debt.

``Negotiations could be a difficult balance, because I get the sense the government would like to do a market friendly restructuring, but what that entails isn't clear,'' Francis said. ``And if they don't get enough relief they could get into trouble again in not so distant future.''

The government had a deficit of $94.3 million in the fiscal year ending 2005, equal to 4.2 percent of gross domestic product and down from a deficit of 8 percent in the previous fiscal year.

Sugar, citrus fruit and juice, and bananas account for about 60 percent of Belize's annual exports, half of which are sent to the U.S. The country relies on tourism for about a fifth of the country's annual GDP.

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#213313 - 08/09/06 10:55 PM Re: Belize Announces Impending Debt Rearrangement
BelTex Offline
Houston Chronicle/Business Section: 8-9-06

http://www.chron.com/disp/story.mpl/business/4103897.html

BELIZE
Nation seeks time to restructure debt
Belize's prime minister this week asked international bondholders to give his nation time to work out the restructuring of nearly $1 billion in public debt to avoid collapse.

Last Wednesday, the cash-strapped country sandwiched between Mexico and Guatemala said it would restructure a $960 million debt load,
over half of which is in private hands and has
become unmanageable.

Said Musa, the prime minister and finance minister, said four successive hurricanes had cost Belize $500 million, which, coupled with falling prices for primary exports like oranges and bananas, had led it into a spiral of mounting debt.

"What we're saying to the creditors is that we're anticipating that the situation will quickly unravel and become unsustainable unless we sit down now and sort things out," he said.

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#213314 - 08/10/06 12:17 AM Re: Belize Announces Impending Debt Rearrangement
Chris Offline
"Said Musa, the prime minister and finance minister, said four successive hurricanes had cost Belize $500 million, which, coupled with falling prices for primary exports like oranges and bananas, had led it into a spiral of mounting debt."

Rubbish, Musa and Fonseca have probably misappropriated that much themselves. Belize's problems are solely down to horrible management and out-of-control corruption on a huge scale.

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