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#455961 - 01/22/13 08:14 AM Superbond 2.0 is Ready For Launch
Marty Offline

Creditor Committee Co-Chair Visits To Say Superbond 2.0 is Ready For Launch

Superbond 2.0 is about two weeks away from launching. That's the news coming out of a prime ministerial press conference held this afternoon. But it wasn't just another announcement like the one held before Christmas, today, Prime Minister Dean Barrow was joined by A-J Mediratta, he's the co-chair of the creditors' committee.

That committee represents over 50% of the bondholders - the group that stands to lose the most from the renegotiation. Mediratta arrived in the country on Saturday where Prime Minister Barrow and Speaker of the House, Mike Peyrefitte, greeted him at the airport. He flew out to San Pedro with his family and returned today for the press conference. His presence indicates that the new deal is done in accord with the creditors. And while they stand to lose hundreds of millions of dollars over the life of the bond, Mediratta was agreeable enough. Both he and the PM agreed that the process would soon be finished:

Prime Minister Dean Barrow
"The general economic terms of the restructuring have been agreed. While then I can't say to you this afternoon that the deal is done, I can tell you that we are so close to finality that we expect to launch the exchange offer within the next week or two."

AJ Mediratta, Greylock Capitol, Co-Chair, Creditor's Committee
"We are very close. A broad agreement on the general terms was reached in late December and we are right now really just priming through the process."

But still, there's not much more on details - and the PM says that is because of US Securities and Exchange Regulations. But he did provide a broad outline:

Prime Minister Dean Barrow
"Those terms will result by all calculations in a savings in cash flow relief for 2012 of US11 million dollars. We are looking at cash flow savings in 2013 of US33 million dollars. We are looking at cash flow savings during the 5 year period 2013-2017 of US100 million dollars and we are looking at cash flow savings during the 10 year period 2013`-2222 of US247 million dollars."

AJ Mediratta
"I am pretty sure that we will see a fewer bond hold."

Pain - that is an operative term in these types of negotiations - because as we said earlier, for Belize to get some ease, the bondholders have to give up hundreds of millions of dollars in earnings that they had expected to realize over the life of the bond. That's the tough reality, but Mediratta says he's not angry:

AJ Mediratta
"I am also frequently asked if I am bad and as I mention a number of bond holders felt quite strong about what was going on and this come up to me from time to time but my firm has done this a long time and we know that countries don't undertake us very likely, it's easy to talk about but for a country to actually on its debt and deal with all the distractions, the lawsuits, the headaches, no country take that likely, so we don't that Belize will not take this likely. I think what Belize has done and how it's done especially through this process I think we will fight well in Belize. I think I am optimistic that what we in Belize agree upon will form a presence for other countries."

And while it might be an example, it's not done yet. Mediratta says they are in touch with 60% of the bondholders - and there's always the possibility of holdouts. Mediratta discussed that and the PM brought up one very significant trouble area:..

AJ Mediratta
"I expect that there will be some bond holders that may disagree with the course of the committee but we are confident that the committee will accept or I will not be here if the committee was not on board with where we are today and I am quite confident that a significant majority will follow the lead."

Prime Minister Dean Barrow
"As recently as last week a memorandum was circulated to bond holders making the case against the concessions as they were describe in that memorandum that the creditor committee was agreeing with Belize. I don't think you have to think too hard to figure out from which particular quarter that that sort of campaign was coming from."

Both sides said that the final details are in the hands of the attorneys - who are now working through the final details.

Channel 7

#455967 - 01/22/13 08:52 AM Re: Superbond 2.0 is Ready For Launch [Re: Marty]
Marty Offline

Bondholders sympathetic to Belize?

The P.M. said the debt flow relief will not eliminate the country’s fiscal or financial gap. While Barrow believes this pending agreement mends the relationship with the external financial community he was also hopeful that debt servicing will be sustainable. AJ Mediratta, a senior partner of Greylock Capital Management told the media that they represent about two hundred million US dollars in total value of the bond. He also said negotiations did not start out smoothly but have now moved beyond that and according to Mediratta, both sides have to agree on all terms of legality before details can be announced. But he seemed confident about wrapping up the deal in the next two weeks. 

AJ Mediratta, Partner, Greylock Capital Management

AJ Mediratta

“The committee has not made a formal statement since early December. So we are aware of the statements that have come out of Belize by the P.M. in late December. But, I’m here to say today that we agree with what the P.M.’s assessment is. We are very close. A broad agreement on the general terms was reached in late December. Right now, really, we are just grinding through the process. It takes time to go from agreement to the lawyer’s drafting the specific language. It’s a big document and it has to be precise. And between that and the holidays, it takes several weeks to play out, but we do think that we are one or two weeks away from wrapping up the final recommendations. Some of them we’ve had the opportunity to discuss today while we are down here.  We got off to a rocky start last summer; there were some press conferences going back and forth. But I feel the process has become conciliatory and it has taken on a genuinely good faith process where both the concerns of Belize and the creditors are being discussed, thought through and what we are trying to come up with is a structure that addresses that you are never going to give everyone everything, but try to get both sides close enough that it works. The committee has said from the outset that we are sympathetic to the challenges facing Belize. That is not just a throw away comment; many of us have known Belize for a long time. For a country to actually default on a step and deal with all the distractions, the lawsuits, the headaches; no country takes that lightly. And so we know Belize did not take this lightly. And I am happy to say that despite that difficult step being taken, Belize has actually really just demonstrated its willingness at pursuing the good faith of process. It really in many ways separates it from countries like say an Ecuador or an Argentina.”

Also present for the announcement were government ministers and members of the negotiating team.

Renegotiated bond to save U.S. $247 Million

The government said today that a deal will soon be struck in re-negotiating the five hundred and fifty million dollars U.S. bond. In 2012, it appeared that a default was imminent, and then the government offered only a partial payment in September. There was a sixty day extension period which expired in November, and then in December the Prime Minister said that an agreement in principle had been reached. Those details are being discussed in meetings between the government and the co-chair of the credit coordinating committee, A.J. Mediratta who is currently in Belize. This afternoon Prime Minister Dean Barrow spoke of the restructured bond agreement but provided few details since the deal has not been sealed and is in its final stages of negotiations. The PM said that it expects that in two weeks it will be concluded and until then full disclosure of the details will be made. But the P.M. did signal that he hopes to realize about two hundred and forty seven million U.S. dollars in relief.

Prime Minister Dean Barrow

“The general economic terms of the restructuring have been agreed. There are one or two minor open issues on that score, but issues that don’t do any violence one way or another to the headline provisions of the restructuring. In addition though, there is a great deal of legal language that must be agreed between the two sides. This is language that will inform the relevant legal provisions, governing the entire indenture; that will reflect the new issue and legal provisions that will govern, as well, the fairly complex role and structure of the trustee of the exchange agent or entities such as those. I can tell you we’re so close to finality that we expect to launch the exchange offer within the next week or two. Until we can do that and, of course, when we do that there will be full and complete disclosure. Those terms will result by our calculations in a savings in cash flow relief for 2012 of U.S. eleven million dollars. Remember that there was an August coupon payment that we missed and thereafter we only made good on half of the payment.  The result of how that’s being treated in the restructured terms will mean that, in fact, we would realize the cash flow savings for 2012 of eleven million (U.S.) dollars. We are looking at cash flow savings in 2013 of thirty-three million dollars—and I am talking of U.S. dollars. We’re looking at cash flow savings during the five year period, 2013 to 2017, of U.S. one hundred and eighteen million dollars. And we’re looking at cash flow savings during the ten year period, 2013 to 2022, of U.S. two hundred and forty-seven million dollars.”

Channel 5

#456272 - 01/25/13 08:21 AM Re: Superbond 2.0 is Ready For Launch [Re: Marty]
Marty Offline

AJ Meditratta; Various Positions

Earlier this week you saw AJ Mediratta appear alongside the Prime Minister at a press conference. He's the Co-chair of what's called the creditors Committee, the group that represents over 50% of the owners of the Superbond.

And while it is the first time we've had a face-to-face encounter with Mediratta, in a sense, he's no stranger to Belize. That's because Mediratta was at Bear Stearns in the early oughts when Belize's bonds first went to the market. As is now well known, that borrowing was unsustainable, and in short order, those bonds had to be re-structured - and packaged into the albatross we now all know as the Superbond which was launched in 2006.

And so we were suitably surprised to see Mediratta appear now at the other end of the table for Superbond 2.0 - representing the bondholders -some of whom bought those bad bonds, marketed by Mediratta and Bear Stearns in the first place. We asked him about that neat transition:...

Jules Vasquez
"You were involved in the Bear Stearns 2 bonds; US1.5 million and US100 million and I think Bear Stearns is also involved in the "designated design insured loans" amounting to 96 million - those are the Zurich ones, I presume. I don't know how often this happens in the world of finance but it is unusual that one is able to work both ends of the table. You were involved in set up of a large part of the Superbond and now you are involved in the renegotiation. Were you not aware then that these bonds were unsustainable?"

AJ Mediratta
"My recollection of all the transactions we did for Belize was that in every instance I remember, we were helping Belize re-finance higher cost debt with lower cost debt. I think we had no reason to think that it was not sustainable but then very few people saw the 2008 crisis coming. That caused crisis for everyone and in fact that's really part of the genesis for why I am saying that we had a lot of sympathy for Belize."

Jules Vasquez
"Sir, what caused the Superbond crisis in Belize was not the 2008 global financial crisis. What caused it were events that preceded (2008). There were fundamental flaws from my view as an observer; that was the time everyone felt there was an endless supply of money and for Belize, the paper was junk from the start and you were right there."

AJ Mediratta
"We were one of many banks that were there and I can't speak for what happened. It's money that we gave to the government that we, like any client, we assumed that both side will act in good faith and that they know what they are doing."

A listing of the Superbond debts shows that it is made up of, partially: 2 Bear Stearns bonds, as well as one from the Royal Bank of Trinidad and Tobago Merchant Bank Limited for US 76 million.

It is worth noting because since then Bear Stearns had an epic collapse and the Royal Bank of Trinidad and Tobago was acquired - both in 2008.

Channel 7


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