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#213543 - 09/25/06 06:40 PM Belize debt refinancing
Marty Offline
There are precedents for what Belize is trying to get done in terms of re-financing its commercial debt. The article below illustrates this.
It is important to note that the plan is to issue one new bond to replace the US$338 million in six series of existing bonds and the US$253 million in commercial loans, roughly $BZ1.2 billion total, with a single amortizing bond, preferably over twenty years.
It is improbable Belize (or any other country for that matter) would be able to float a bond that pays 2% interest.
There is much more very current information available on Belize’s debt rearrangement efforts on the Central Bank of Belize website at: http://www.centralbank.org.bz/dm_browse.asp?pid=128.
It is obvious that many Belizeans do not understand the process, and as evinced by another posting on the subject on this list, there are those who prefer to view this and other matters through the prison of their political prism.
Panama Refinances Debt
As part of an ongoing liability management program, Panama sold $980 million in 20-year bond yielding 7.295%. Citgroup managed the transaction. The bond was meant to refinance three bond issues that the sovereign bought back in November 2005; a $449 million, 8.25% issue maturing in 2008; a $165 million, 9.625% issue maturing in 2011, and a $201 million, 10.75% deal due in 2020. The moves are part of a program to extend its maturities and lower its financing costs as the country’s economic fundamentals improve.
Source: LatinFinance magazine, February 2006

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#213544 - 09/26/06 04:25 PM Re: Belize debt refinancing
Marty Offline
Belize Close To Debt Default, by Mike Godfrey, Tax-News.com, Washington 26 September 2006


Although Belize has undertaken savage fiscal cut-backs under Prime Minister Said Musa, reducing a deficit of 9% of GDP to 3% in just two years according to the IMF, the government had to admit last week that it was close to default, and will have to restructure its debt.

Mr Musa denied that he is planning a devaluation, but market rumours suggest a 'haircut' for existing debt holders of 25% to 50% of their loans. Standard & Poor's recently lowered Belize's sovereign credit rating from CCC- to CC and said that a punitive debt swap would reduce the rating to SD, for Selective Default.

Currently, Belize has six outstanding international bonds totaling $338 million and $253 million in commercial loans. A further $116 million is accounted for by domestic debt. It is thought likely that all external debt will be swapped for a new bond issue.

Belize bonds were trading at 72 cents on the dollar last week, and bond yields on the 9.75% coupon bond due in 2015 reached nearly 16%.

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

Musa blamed four tropical storms which hit Belize between 1999 and 2003 for the country's woes, also mentioning a major infrastructure investment programme and rising oil prices.

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#213545 - 09/26/06 04:29 PM Re: Belize debt refinancing
Marty Offline
The external portion of the debt that the Government of Belize seeks to refinance is BZ$1.2 billion. The information is available at http://www.centralbank.org.bz/dm_browse.asp?pid=128.

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