Portofino Resort- Now with a new BEACH BAR!!
Page 1 of 2 1 2 >
Topic Options
#518858 - 11/10/16 11:14 AM Superbond 3.0?
Marty Offline

Earlier, we told you that the Prime Minister was in New York on official business.  But, up until two hours ago, no one knew what that official business was all about.  Well, thanks to a government press release, we know now.  Can you say, Superbond 3.0?  That's right; Government has announced that it intends to commence discussions with holders of the Superbond.  An official release says this is due to, quote, "the serious economic and financial challenges currently facing the country." 

But, if you can recall, the Superbond was just re-negotiated in 2013.  Well, the bullet payments for this restructured Superbond 2.0 are coming up in 2017, and, guess what? Government won't be able to pay it.  
An official release puts is plainly, quote, "Belize's economy has significantly underperformed in comparison with the projections used at the time in setting the terms of the 2038 Bonds." 

So now, the government's financial team will meet with individual bondholders or a committee representing the bondholders basically to tell them that hard times are here and government can't pay. These meetings will be held before the end of November. Government has retained Citigroup Global Markets as its structuring advisor and a New York law firm as its counsel. 

Government is expected to offer the bondholders some sort of incentive to capitalize on present value, while deferring interest payments.  The bond matures in the year 2038.

Channel 7


Top
#518864 - 11/10/16 11:37 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

Government Seeks Audience with US Bondholders

Tonight, the Government of Belize is using the recent report from the International Monetary Fund to substantiate the economic trying times that Belize is currently in as they announce their intention of meeting with the country’s US bondholders. In a release issued by the Government of Belize, officials intend to, quote, “meet with individual bondholders or a committee representing the bondholders (if the bondholders elect to form such a committee) before the end of November to discuss measures necessary to place the 2038 Bonds on a fully sustainable basis.

The Government of Belize has retained Citigroup Global Markets Inc. as its structuring advisor and Cleary Gottlieb Steen & Hamilton LLP as its legal counsel in this process.” End of quote. According to Financial Secretary, Joseph Waight, any amendments to be made to the terms of the instruments with the approval of the bondholders will need to be implemented before the officials submit their 2017 fiscal year budget to the Belize Parliament.

With the need for the budget to be submitted to parliament for consideration early next year there is the need to expedite the process. The economic challenges cited in the release includes low growth, rising fiscal deficits, a deteriorating balance of payments position, and declining sovereign debt indicators; challenges that have been exacerbated by slow global growth, U.S. dollar strength, Hurricane Earl, a substantial decline in key commodity production and prices, and the higher than anticipated arbitration awards.

The release continued by stating, quote, “Belize’s 2038 Bonds were issued in 2013 and are the only Government debt securities outstanding in the international capital markets. For a variety of reasons, Belize’s economy has significantly underperformed in comparison with the projections used at the time in setting the terms of the 2038 Bonds.” End of quote.

LOVEFM


Top
#518913 - 11/12/16 11:25 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

What’s Up With the 3rd Superbond Restructuring

Prime Minister Dean Barrow returns to the country tomorrow after making a trip for official business. Big business, actually - try the half a billion dollar super bond 3.0. He's trying to get it re-finances so that government does;t have to make crippling bullet payments next year. But all we've seen so far is a press release, and today we asked Minister Elrington what he knew about Superbond 3.0.

Hon. Wilfred Elrington, Minister of Foreign Affairs
"I imagine he is seeking to negotiate terms to make it more favorable for us to discharge our obligations under the contract. It's exceedingly important when one has loans for want to be very careful not to give the impression that one does not want to repay it in accordance with the terms and conditions under which it was granted. Tradition has been for lenders to be reluctant to renegotiate loans. But Prime Minister is prudent and personal. He is doing all in his power to what extent we can in fact reduce the lenders to agree to have a renegotiation of the payment plan."

Courtney Weathernburne, 7News
"In your view, I should say the government's view, what would be the most successful method or approach to restructuring the super bond?"

Hon. Wilfred Elrington, Minister of Foreign Affairs
"I think if we could get some extension of time in which to pay it, reduction of capital that we have to pay. Also reduction of interest. Those are areas where I am sure the Prime Minister and his advisors will be looking at; length of the repayment period; the amount that we have to pay back in principal; the amount that we have to pay in interest payment percentage and interest, those are things which I think they will discuss."

As an aside, Elrington said that there could be an increase of taxes in the next the next fiscal year. The picture that government painted to bondholders was certainly dire: it says the country faces, quote, "serious economic and financial challenges...low growth, rising fiscal deficits, a deteriorating balance of payments position, and declining sovereign debt indicators." end quote.

Hon. Heredia Has High Hope For Superbond 3.0 Restructuring

We also got a chance to catch up with Tourism Minister Manuel Heredia Jr., and we asked him about what he knew of these renegotiation efforts. He couldn't say much, but he told us that he strongly believes that the Prime Minister will be successful:

Daniel Ortiz, 7News
"Did the cabinet have any kind of input on the Prime Minister's decision to go to New York to renegotiate the super bond to reshape it into 3.0?"

Hon. Manuel Heredia Jr., Minister of Tourism
"Well all I can tell you is that the Prime Minister is abroad trying to negotiate for the best intention of Belize. The details of that will be revealed probably Tuesday, but I am sure that every time our Prime Minister tries to accomplish something he succeeds. This time I believe that whatever the details will be Tuesday, it will be good news for Belize and for everyone."

Daniel Ortiz, 7News
"Sir is this super bond restructuring possibly an indication of economic hard times? Can you say if the cabinet is considering an increase in taxes for the next fiscal year?"

Hon. Manuel Heredia Jr., Minister of Tourism
"Well we have not spoken about the new fiscal year, I know that everywhere in their world today there is hardship, but as good leaders and in particular I believe my Prime Minister is one of the best leader and Prime Minister that Belize has ever had and I'm sure that the more he can get for Belize and the less strains that people can have, I believe that that is what he wants to accomplish. I particularly believe the same as the Prime Minister that we are there to work in the general interest of our country. We believe that we are there for the less fortunate. It is a pro-poor government and we will continue in that path to make sure that the livelihood of our people can be uplifted."

Channel 7


Top
#519012 - 11/15/16 05:53 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

Reloading The Bond

Prime Minister Dean Barrow returned the country on Saturday afternoon after traveling to New York City on official business. He was there along with Economic Ambassador Mark Espat and Financial Secretary Joseph Waight to speak with Belize's financial advisors. They are finalizing the country's plan approach bondholders to convince them restructure the Superbond, for the second time in less than 4 years.

The Government needs immediate relief from the crippling bullet payments which start next year.

When the PM landed at the PGIA on Saturday, we spoke to him to discuss what the strategy will look like to get buy-in from bond holders. Here's what he told us:

Rt. Hon. Dean Barrow, Prime Minister of Belize
"I went together with Ambassador Espat and the Financial Secretary. We went to finalize matters with our legal and financial advisors prior to officially notifying bond holders and the public that we are going to be seeking to restructure. We have agreed our strategy and now it is a matter of actually engaging the bond holders in the face to face negotiations which Ambassador Espat will lead together with the city group which is the sort of financial intermediary advisories."

"We met with both Cleary Gottlieb, Lee Buchheit, who is the council from firm with whom Belize deals and with the city group. As I said, the whole idea was to be certain that in terms of our game plan going forward, we were all absolutely on the same page so that there could be no surprises. That was basically what that meeting was about. Preparatory as I said the actual engagement with the bond holders which clearly by way of Mr. Buchheit. City and Ambassador Espat will lead."

Ambassador Mark Espat, Financial advisor - GOB
"I think there are only 3 possibilities in that regard. There is the coupon rates, the interest rate being paid, there is the time when the principal repayment is supposed to start which at this present time is August of 2019 and there is the ultimate maturity which is schedule at this time for 2035. So those are the 3 elements that will be in play."

Daniel Ortiz, 7News
"What are those numbers? Can you say that you intend to look at and proposed to those bond holders?"

Ambassador Mark Espat, Financial advisor - GOB
"I think that would be premature at this point. The government of Belize and the terms and conditions of the bonds have an obligation to consult with bond holders and to confer to creditor committee when that committee is form. We fully expect that that committee will be formed in the coming days and Belize will engage in those discussions in good faith with the ultimate objective as Prime Minister Barrow enunciated just now to ensure long term sustainability."

Will Bondholders Lose Patience with “Malpago” Belize?

The Government's press release from last Wednesday said that this restructuring effort is due to, quote, "The serious economic and financial challenges currently facing the country…" End quote.

That statement also said, "Belize's economy has significantly underperformed in comparison with the projections used at the time in setting the terms of the 2038 Bonds."

As we said, this is 3 years and 8 months after the Superbond 2.0 was floated. That was a refinancing of the original Superbond, which in itself was a re-financing and consolidation of a bunch of high interest bonds that the Musa Administration had racked up. So, this is the third time government is going to bondholders to re-finance. We asked the Prime Minister about the effect it could have on the confidence of bondholders:

Rt. Hon. Dean Barrow, Prime Minister of Belize
"Clearly we are going through some difficult times. Bottom-line is though is that a number of the assumptions that were made in common between ourselves and the bond holders when we last restructure have not proven to be valid or have not proven to be durable and so going forward we are convinced that we need a redo and this time the level of relief that we are looking for must be such that it will be absolutely sustainable even in the face of the vicissitudes that can overtake any economy."

Daniel Ortiz, 7News
"Is the government concern that the bond holders may lose confidence in our financial stability, having to restructure at such a frequency?"

Rt. Hon. Dean Barrow, Prime Minister of Belize
"Look, I don't know how the question of confidence going forward can arise. We are both in this and stuck with the arrangement which sees Belize as the debtor visage these creditors who are the holders of the bonds. We are not looking to shaft the creditors. We are not looking to screw the bond holders. We are looking to ensure that our country finally obtains the relief that is for us a sort of - the relief that for us is absolutely critical. We believe that there is a way to do this without utterly as it were seeing off the bond holders. Clearly adjustments will have to be made. But there are big people, these are experience players in the market."

Channel 7


Superbond 3.0 – Prime Minister Speaks of Guaranteed Sustainability

Dean Barrow

Prime Minister Barrow, accompanied by Financial Secretary Joseph Waight and Economic Ambassador Mark Espat, returned from a working visit to New York on Saturday, following a series of meetings with G.O.B.’s legal and financial advisors in the United States.  The three-man team met with Citigroup Global Markets Incorporated and Cleary Gottlieb Steen and Hamilton seeking an adjustment of the terms and conditions of the present agreement with bondholders on the billion dollar super bond.  Government is hoping to reduce payments and increase the lifespan of the bond beyond 2038.  The next payment is due in February 2017 and government wants a committee of bondholders to lower rates. But what did the Prime Minister and his team achieve in New York? News Five spoke with PM Barrow and Ambassador Espat upon their return over the weekend.

Prime Minister Dean Barrow

“As you’ve already found out, I went together with Ambassador Espat and the financial secretary.  We went to finalize matters with our legal and financial advisors prior to officially notifying bondholders and the public that we are going to be seeking to restructure.  We have agreed on our strategy and now it is a matter of actually engaging the bondholders in a face-to-face negotiations which Ambassador Espat will lead together with the CitiGroup which is the sort of financial intermediary that’s advising us.”

Reporter

“Explain to us what has necessitated this from the perspective of the government, in terms of our financial picture.”

Prime Minister Dean Barrow

“Well it is what the press release said, clearly we are going through some difficult times and the bottom line is though that a number of the assumptions that were made in common between ourselves and the bondholders when we last restructured have not proven to be valid or have not proven to be durable and so going forward we are convinced that we need a redo and this time the level of relief that we are looking for must be such that it will be absolutely sustainable even in the face of the vicissitudes that can overtake any economy.  So we are looking for a degree of relief that will mean that we do not have to worry in the short term.  In the medium term, even in the long term, no matter what circumstances might overtake the country.”

Reporter

“Sir, can you give us your perspective on what would be a successful restructuring effort should the bondholders be receptive?”

Prime Minister Dean Barrow

“As I said, we are looking for an outcome that will absolutely guarantee sustainability.”

Belize Makes Preparations to Face Committee of Bondholders

Mark Espat

Ambassador Mark Espat, who will meet with bondholders directly, outlines three possible outcomes.  While it is too early to determine any figures and dollar amounts, Espat says that the formation of a creditor committee is pending.

Mark Espat, Economic Ambassador

“I think there are only three possibilities in that regard.  There is the coupon rate, the interest rate being paid.  There is the time when the principal repayment is supposed to start which at this present time is August 2019 and there is the ultimate maturity which is scheduled at this time for 2035.  So those are the three elements that will be in play.”

Reporter

“What are those numbers?  Can you say that you intend to look at and propose to those bondholders?”

Dean Barrow

Mark Espat

“No.  I think that would be premature at this point.  The Government of Belize, in the terms and conditions of the bond, have an obligation to consult with bondholders and to confer with a creditor committee when such a committee is formed.  We fully expect that that committee will be formed in the coming days and Belize will engage in those discussions in good faith, with the ultimate objective as Prime Minister Barrow enunciated just now, to ensure long terms sustainability.”

Prime Minister Dean Barrow

“As I said, the whole idea was to be certain that in terms of our game plan going forward we were all absolutely on the same page so that there could be no surprises.  That was basically what that meeting was about, preparatory to, as I said, the actual engagement with the bondholders which Cleary, by way of Mr. Buckite and Citi and Ambassador Espat will lead.”

Taxpayers Must Prepare for “Restructuring”

Dean Barrow

The government said last week that the economy is in dire straits and is severely underperforming. With the proposed restructuring of the existing debt, there is anticipation that a tax increase may be on the table in 2017 budget. 

Prime Minister Dean Barrow

“We’re both in this and stuck with the arrangement which sees Belize as the debtor vis-à-vis these creditors who are the holders of the bonds.  We are not looking to shaft the creditors, we are not looking to screw the bondholders.  We are looking to ensure that our country finally obtains the relief that is for us a sort of… the belief that for us is absolutely critical.  We believe that there is a way to do this without utterly, as it were, seeing off the bondholders.  Clearly adjustments will have to be made but these are big people, these are experienced players in the market.  They can understand as well as we do that circumstances change and circumstances have changed; apart from everything else there’s been the hurricane.  So we might be perhaps, from one point of view, a little too optimistic, but we genuinely are convinced that we can do this, that we can work this thing out and reach a place that is going to be ultimately satisfactory to Belize without fundamentally prejudicing the bondholders.”

Reporter

“Sir, are we moving towards a trajectory to a place of increased taxes next fiscal year, given all the financial pressures additionally with the hurricane?”

Prime Minister Dean Barrow

“Well, we’ve made no secret of the fact that there will have to be a degree of fiscal consolidation.  So there’s going to have to be a tax restructuring, as well as a bond restructuring exercise that we will need to undertake, that we have already started on.”

Channel 5


Top
#519041 - 11/16/16 06:11 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

John B Says Blame Superbond 3 On The UDP

The international rating agency Standard and Poors today downgraded Belize's sovereign credit rating to CCC+ with a negative outlook, after it was announced that government was going for another restructuring of the half a billion dollar superbond. The Government of Belize is telling its bondholders that there are "serious economic and financial challenges currently facing the country" and that it can't afford to make the bullet payments in 2017. And while the Superbond is all commercial debt that was accumulated during the last PUP government - today opposition leader John Briceno held a press conference to say that the public should blame Superbond 3 on the UDP:...

Hon. John Briceno, PUP Party Leader
"The facts are that we are in this position because of the UDP incompetence and the UDP messed and this is the UDP superbond. They made certain promises to the bond holders that they were going to reduce the level from 60% and here we are at 81% - that they were going to have fiscal discipline. Yet they continue to have massive deficits. Now when you look at all of this and that the Prime Minister now is going once again for a renegotiation. We need to take into consideration that the Prime Minister is on his way out. He doesn't really cares what is going to happened to the Belizean people, because the bondholders are not going to give in unless there is massive pain on the Belizean people. Taxes will have to go up. for some time, the IMF has been saying that the GST has to go up to 15%, been saying and the Prime Minister admitted it, that they will have to cut down expenses or the expenditures from the government, that is a code word for retrenchment that retrenchment is coming sooner, more sooner than later."

Jules Vasquez, 7News
"The superbond is still trying... to accrued while your party was in government the last time you were a big factor of the government and the original loans rated I believe were like 17 loans with an interest rate of probably 12%."

Hon. John Briceno, PUP Party Leader
"It was 8%."

Jules Vasquez, 7News
"No sir, the superbond 1 dropped it to 8%. Then superbond dropped it to 5.75%."

Hon. John Briceno, PUP Party Leader
"6%."

Jules Vasquez, 7News
"The original loans rated average was 12%. So then the problem with retiring this debt is a problem that really started when you were in government. How do you respond to that?"

Hon. John Briceno, PUP Party Leader
"That has already been addressed Jules. You can't continue to blame the people over and over and over. If the Prime Minister was doing the right things, managing this economy properly, investing the money - remember, 375 million dollars of Petrocaribe money was squandered."

Jules Vasquez, 7News
"The original superbond, most of the 17 loans or at least 8 of them were undertaken without the approval of the parliament. It was engineered through the Central Bank for the, I believe the express purpose of avoiding having to take it through parliament. Now those are the same loans that are wrapped into this superbond situation. Is that something that you were aware of at the time that the Central Bank was undertaking sovereign loans or loans that the state is still responsible for? Was it a deliberate act of obfuscation to direct it through the Central Bank, and in one case the DFC."

Hon. John Briceno, PUP Party Leader
"I don't think it's a matter of us not being aware that these loans were taking place. Of course we were aware that these loans were taking place. But what I think what happened was that there was not absolute clarity in the finance and audit act. There was not clarity to say that all loans must go to the house."

"If this government continues to operate the way it has been operating over the past 8 years, you could renegotiate the superbond and 3-4 years from now, they will have the same problem."

Jules Vasquez, 7News
"The government needs to be successful so that there is not a huge burden or a greater burden placed on tax payers in the next fiscal year, Do you in that regard at least hope for the government's success?"

Hon. John Briceno, PUP Party Leader
"I have always made it very clear that I am first a Belizean. I want things to go well in this country and if the government has embarked in a renegotiation of the superbond, of course I want it to be successful."

Today's "Latin Finance Daily Brief", an online news outlet quotes, Sean Newman, a US portfolio manager as saying that, quote, "bondholders should come together to aggressively demand that the terms be met." He adds, quote, "Before the current government came to power, the country was actually operating with a minor fiscal deficit. What the prime minister has done since coming into office is ramp up spending."

Channel 7


Top
#519092 - 11/18/16 06:17 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

Belize bondholders ready talks with government

Holders of Belize bonds announced this week that they had formed a committee in response to the government's desire to open debt talks this month.

The Central American nation said earlier in the month that it would need to discuss ways to amend its outstanding 2038 bonds at a time of rising fiscal deficits.

The 2038s were issued in 2013 in what was then the country's second restructuring in a matter of years. The bonds carry a step-up coupon that climbs from 5% to 6.767% in August 2017.

While creditors note that the restructuring has provided Belize with US$100m in debt service relief to date, the government said circumstances have changed since then.

"Belize's economy has significantly underperformed in comparison with projections used at the time in setting the terms of the 2038 bonds," the government said this month.

S&P lowered the country's rating on Monday to CCC+ from B-, noting that fiscal and external balances have impaired Belize's ability to meet its financial requirements.

"The sovereign's debt servicing capacity has become more vulnerable to potentially worsening external, financial, and economic conditions, which could reduce its capacity and willingness to pay on its commercial bond," S&P said.

The 2038 bonds have tumbled 16.25 points to 40.50 since Monday.

Belize has retained Citigroup Global Markets as a structuring adviser and Cleary Gottlieb Steen & Hamilton LLP as legal counsel.

Creditors have hired BroadSpan Capital LLC as financial adviser and Blitzer Consulting as special adviser. (Reporting by Paul Kilby; Additional reporting by Christopher Spink; Editing by Marc Carnegie)

Reuters


Top
#519195 - 11/22/16 06:22 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

“Super” Bondholders Uneasy With “Unprecedented” Third Restructuring

The Prime Minister disclosed two weeks ago that the superbond is being renegotiated for the third time because the economy had underperformed. There were not much details available, but today, we spoke with the Special Advisor to the Coordinating Committee of Bondholders via phone. Charles Blitzer says that stockholders are uneasy going into a third restructuring of the Super Bond, in light of present economic conditions facing Belize. Blitzer explained that the group of bondholders are concerned that a third version of the mounting national debt is unprecedented. Those bonds were issued as a result of a restructuring completed by the Barrow administration in March 2013 which has provided Belize with over one hundred million U.S. dollars in relief to date.  According to Blitzer, while they are prepared to listen to government’s proposal, they are also taking into serious consideration recent reports issued by the World Bank and IMF.

On the phone: Charles Blitzer, Blitzer Consulting

“The group is under formation.  It’s got a core group of significant bondholders who know Belize well and as we mentioned in the announcement, we are acting in response to what the government says is its intention to seek some sort of a restructuring, welcoming the formation of a committee.  At this point we don’t know exactly what government has in mind and we’re in listening mode, not in negotiating mode yet.”

Isani Cayetano

“Granted.  Is there any concern among the bondholders seeing as though this the third time a restructuring is being sought by the Government of Belize?”

On the phone: Charles Blitzer

“Yes, I think it’s fair to say there is some concern.  Restructuring the same bonds twice is very rare, restructuring three times is I think, perhaps unprecedented.  So there is concern why and, you know, we’re open to listening to more.”

Isani Cayetano

“Can you speak to us with some degree of certainty, you haven’t gotten a chance as yet to listen to what the government has to say, you mentioned to me that you guys are still open to hearing what the government has to propose.  Is there any position insofar as the bondholders going into this meeting or into this listening process?”

On the phone: Charles Blitzer

“Well I think the basic position is that first of all we intend to follow very carefully the well established best practices in relations between governments and creditors, including bondholders.  These are incorporated among other places in the G20 endorsed principles as it’s called and that’s our basic position at this point.  There isn’t much information about what the government wants to do and why.  We’re cognizant of various issues facing the country and cognizant of the recommendations that the World Bank made in its last review which was published a short time ago.”

Isani Cayetano

“Taking into consideration your cognizance of the present economic climate in the country and what have you, will it be considered that there may very well be austerity measures on this end insofar as Belizeans either having to pay more taxes or what have you to meet the requirements of the Super Bond 3.0?”

On the phone: Charles Blitzer

“Well I think that in the IMF Report they lay out a variety of measures, both in terms of fiscal side and in terms of structural measures which could have a significant impact in terms of both.  And so we are cognizant of all of that but the issues that are laid out in the IMF Report go well beyond the bonds.  There are a number of other pressures on the balance of payments, on the fiscal that go well beyond the bonds.  At this point it’s not clear why the focus is on that.”

Channel 5


Top
#519556 - 12/07/16 06:01 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

Superbond: The “Sob Story” GOB Giving Bondholders

Last night we told you about how the Prime Minister went to New York on Superbond business along with Economic Ambassador Mark Espat, and Financial Secretary Joseph Waight. The press release from the Government was very vague, but it did say that he was to "attend a meeting... in connection with the Superbond."

As has been widely reported, government is trying to get the bondholders to restructure the Superbond for a third time because Belize cannot meet the step-up payments under Superbond 2.0. Well, we've gotten a copy of the powerpoint presentation the Government made to the superbond holders.

It's dated, "November 2016", and it outlines the financial picture of the country from the Government's perspective. It's a 22-slide presentation filled with all the figures, but a few parts which caught our attention starts on page 8. It reads, quote, "There has been a precipitous decline in economic activity in Belize over the past 2 years. Overall growth fell from a robust pace of 4.1 in 2014 to 1.0 in 2015. Earlier forecasts for 2016 suggested a further decline below 1% growth, but the economy contracted by 0.5 in the first half of the year." End quote.

Slide 9 says that the country's current account deficit has become dangerously large. The Government's estimates say that exports will decline in 2016, for the 4th consecutive year, reaching 498 million US dollars, which is 20% lower than the recent peak of 622 million US dollars. All major industries, such as Citrus and Fisheries have been hit by disease and other challenges.

Belize's foreign exchange reserves have been drained due to the compensation payments for BTL and BEL. By the end of the year, it is forecasted to reach 380 US million dollars, which is a 22% decline in only 2 years. The Government then engages in some real talk with the bondholders revealing that for BTL Belize was slapped with a 550 million Belize dollar compensation, or 275 million US dollars. As of right now, Belize has already paid 350 million Belize dollars, and owes another 200 million dollars. For BEL, Belize has paid 70 million Belize Dollars, and the previous owners retain 33% of the shares in the company.

The Government then goes about showing its cash flow and payment obligations, and one figure which caught our attention is the public debt. For 2016, the Government is reporting that the country's public debt is 2.878 billion dollars. The Government says that on the current path, the debt will increase by about 90 or more million dollars every year.

Another part of the presentation which caught our attention is this pie chart on slide number 19. It parcels out the country's national debt in the second pie chart showing that the 1.053 billion dollar Superbond, which takes up 34 percent of the national debt. Domestic Debt is 746 million Belize dollars while the official external debt is at 1.331 billion Belize dollars.

Channel 7


Austerity Measures Remain Uncertain as GoB Presents Report to Bondholders

March 2013 saw the Barrow administration applauded by many after renegotiating the Superbond that came into effect by the Said Musa administration during the period 1998 – 2008. That renegotiation reportedly saved Belize almost half billion dollars. Fast forward three and a half years later and Prime Minister Dean Barrow is having talks with creditors for another renegotiation.

There is a 17-page document that was reportedly prepared to present to the bondholders in meetings held in New York City over the last few days. While we are yet to hear from Government officials on how those meetings are progressing, we can tell you that the factors being presented to the creditors are mostly what the International Monetary Fund had to say in their October 2016 Article Four Report. The first part of the report zoomed in on what has been termed, ‘an imperilled economy’; in that section the report spoke of an agriculture sector that has been impaired over the last two years with fish and citrus being hit by diseases and the banana sector experiencing financial troubles.


It also spoke of the oil sector that has been uneasy as production has plummeted to virtually zero with the fall in oil prices aggravating an already troubled sector. The hit by Hurricane Earl was also noted as a damaging factor along with the fact that the strength of the US dollar has made way for an over-valuation of the Belize dollar thus harming the country’s competitiveness. Several graphs and pie charts were used with reference from the Central Bank of Belize and the recent IMF Report to explain the country’s debt as well as GDP (Gross Domestic Product) and Forecasts for the coming years.

The nationalization of two utility companies in Belize was cited as a major factor that now lends to the economy’s hardships; although on page twelveof the report it was noted, quote, “GoB is satisfied that the acquisitions and its ongoing efforts to contest the legacy claims are in the national interest and has actually reduced the ultimate costs to taxpayers and the risks to creditors.” End of quote. Salaries being paid out to public officers were another factor cited for the country’s capital expenditures.

In the section of consolidation measures, the report noted, quote, “The government’s fiscal policy initiatives seek to balance the need for fiscal consolidation and the equally important consideration of maintaining the stability of the economy. The government has calibrated its program to ensure that the policy package does not push the economy into a recession.” End of quote. Measures already taken were the fuel tax in January 2015 and March 2016 which did contribute to growth in the GDP. While the report did not go into details as to what other measures will be taken, it was noted that, quote, “As part of its planning for its 2017/18 budget, the government is considering measures that would increase revenues by another 2% of projected 2017/18 GDP above previously projected revenues and reduce expenditures by 1% of 2017/18 GDP.

The government is organizing a public forum involving a broad spectrum of private groups to mobilize public support for the reform efforts.” End of quote. Prime Minister along with his delegation is expected back in the country tomorrow.

LOVEFM


Top
#519593 - 12/08/16 06:18 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

GOB Offers Bondholders “Consent Solicitation Statement”

And while the Prime Minister is in New York, the meetings with bondholders have concluded. According to a release on the Central Bank website, government is proposing to bondholders something called a "Consent Solicitation Statement." This is kind of like a first offer, which government will send to bondholders in early January 2017. Government is asking for responses by mid-February of 2017. If at that point, 75% of the bondholders agree with the terms in the Consent Solicitation Statement – well then Government hopes to finalize a new agreement with bondholders before the next Superbond payment is due on February 20, 2017. But that's only the plan; it could get a lot more complex and drawn out, if fewer than 75% of the bondholders give their consent.

Likely, bondholders will want the Government and the people of Belize to "share the pain." And that's why the press release says that , quote, "Government is seeking Parliamentary approval for a rigorous fiscal reform agenda." These fiscal adjustment measures, include refinancing the Superbond, and, in the release, Government is inviting bond-holders, quote, "to comment on possible structures for amending the financial terms of those instruments in order to put the Bonds on a sustainable footing."

Of course, that's what bondholders thought they did three years ago with Superbond 2.0, and that's why this time, government stresses, quote, "Its objective is to put the 2038 Bonds on a permanently sustainable footing. No one -- least of all the Government of Belize -- wishes to contemplate the prospect of a fourth restructuring of these instruments." End quote.

Government suggests that the formula to fix the Superbond could include, quote, "a principal haircut, adjustments to coupon, an amendment of the amortization schedule, a stretch out of final maturity, or a combination of two or more of these techniques." It concludes, breezily, quote "The Government is approaching the matter with an open mind."

Channel 7


Top
#519644 - 12/10/16 06:28 AM Re: Superbond 3.0? [Re: Marty]
Marty Offline

Belize Not Looking Good for Superbond Deal But It’s Not Over

Prime Minister Dean Barrow returns home this weekend following meetings with bondholders in New York to negotiate a third restructuring of the Superbond.  Reports of Belize’s gloomy economic outlook have factored into the discussions and bondholders are paying close attention to proposed measures by government to steer the country through the recession.  Earlier today, News Five spoke by phone with Charles Blitzer, special advisor to the Coordinating Committee of Bondholders.  He told us that not only are bondholders nervous, they are also trying to avoid having the matter being taken lightly. While another payment has been scheduled for February 2017, government has gone no farther than acknowledging the date.  In the interim, the Central Bank earlier this week asked bondholders to consider several options in redesigning the third iteration of the Superbond. As for future meetings with bondholders, Blitzer told News Five that those dates should not be published, but that all parties must continue in good faith to resolve the issue.

On the Phone: Charles Blitzer, Blitzer Consulting

“Bondholders, of course, have looked carefully at the postings from the government on Central Bank’s website and they are studying them quite carefully.  At a high level I think that as a group, bondholders would not like to see a resolution which results in merely kicking the can down the road and not moving more definitively for Belize to credibly close its financing gaps and reduce its crisis risk.  And that is more than just dealing with this one bond.”

Isani Cayetano

“There is another scheduled payment for early next year, correct?  Has there been any indication that Belize would be able to make this payment?”

On the Phone: Charles Blitzer

“All we know is two things: one, is what they posted on their website which does not refer to the date.  That’s it, it’s a fact there’s a scheduled payment.  What the government said, you can read on the Central Bank’s [website], they have not gone further than to acknowledge that date.”

Isani Cayetano

“Now you’ve shared initial concerns with regards to the restructuring of the Super Bond for a third time.  Based on the information posted on the Central Bank’s website, have bondholders shared any kind of additional concerns or trepidations based on what they are now seeing?”

On the Phone: Charles Blitzer

“The government has posted last week some measures that they would take on the fiscal side but they haven’t demonstrated how those measures are sufficient to significantly reduce the risk of future crises in Belize and I think the bondholders for sure are studying that and trying to figure things out.  But we haven’t seen any full forecast from the government which would show folks that these are sufficient and they are much less what was suggested several months ago by the IMF.  As the timing and scheduling and format of meetings with advisors or principals aren’t something that should be announced or discussed by the government but usually it’s a good thing in negotiations to just not publish schedules of these things but to work on this in good faith as I think we’re trying to do.”

We’ll have more on the Super Bond negotiations on Monday.

Channel 5


Belize and creditors kick off restructuring talks

Talks between Belize and creditors over a potential restructuring of the country's US$530m 2038 bond kicked off in New York this week, according to sources close to the matter.

At the meeting, officials from the Central American country indicated that they intend to move quickly to ease their debt burden, which weak growth, large fiscal and current account deficits have made harder to service.

A potential restructuring would be the third in a decade for Belize, which first consolidated its external debt into a so-called superbond in 2007 and then restructured that note by issuing 2038 bonds in 2013.

The government now hopes to amend the terms of the 2038 notes through a simple consent solicitation.

Belize officials are asking investor feedback on tweaking the terms of the 2038s to include a reduction in principal, an amendment to the notes's coupon and amortization structure, or an extension of the final maturity, according to a statement on the Central Bank of Belize's website.

"The government is approaching the matter with an open mind," the statement said. "Its objective is to put the 2038 bonds on a permanently sustainable footing."

Such changes can be approved by investors representing at least 75% of the outstanding and become binding for all holders.

NO TO STOPGAP

Creditors however are wary of stopgap measures and are concerned that the fiscal adjustment put forward by Belize thus far may not be sufficient to steady the ship without the involvement of the International Monetary Fund.

Charles Blitzer, a former IMF staffer who is advising the creditors, said debt relief without a strong commitment to fiscal reform would do little to alleviate the country's woes.

"It is important that another restructuring not result in merely kicking the can down the road," he told IFR. "In my opinion, there must be a strong, and credible, fiscal program in place in order to significantly reduce future crisis risk for Belize."

The government has proposed fiscal adjustments worth 3% of GDP for its next fiscal year but said these efforts would need to be complemented by "significant" debt relief.

Belize's budget deficit reached 8% of GDP in 2015 and is expected to end 2016 at 5%, according to IMF estimates.

"It is a bit of a dance right now," one of the creditors told IFR. "The government views it as too politically costly to design programs to be funded by the IMF. We are talking around those issues."

Discussions on the financial terms of the restructuring are yet to take place, but the government is hoping that a more substantive meeting with creditors could take place before the end of the year, one of the sources said.

That would allow the government to stick to its desired timeline, according to which the consent solicitation would be launched in January and the changes would take effect no later than February 20, when the next coupon payment is due.

Such a timeframe would also allow the authorities to have a clearer picture before the budget for the 2017/18 fiscal year is submitted to the National Assembly.

The 2038 bond starts amortizing in 2019, while its coupon is set to increase from 5% currently to 6.767% on August 20 and through maturity.

Belize has retained Citigroup as a structuring adviser and law firm Cleary Gottlieb Steen & Hamilton as legal counsel.

Creditors have hired BroadSpan Capital as financial adviser and Blitzer Consulting as special adviser.

Reuters


Top
Page 1 of 2 1 2 >

Links
Click for excellent scuba lessons with Elbert Greer!


Things to do

News
Daily News
Daily Weather

Classified Ads
BelizeNews.com
San Pedro Sun
Ambergris Today
SP Town Council
Channel 7
Channel 5
Amandala
Love FM
The Reporter
Caye Caulker
Chronicles

PLUS TV
TV Newscasts
Radio Stations

Click for our
Search thousands of Belizean-only websites

Event Guides
Event Calendar
Specials & Events
Things to Do
SanPedroScoop
iTravel Belize
Paradise Theater

Blogs
San Pedro Scoop!
Tia Chocolate
Tacogirl
My Beautiful Belize
I-Travel Belize
Belize Adventure
Belize Hub
Romantic Travel
Bound for Belize
Conch Creative
As The Coconuts Drop
More Blogs...
Search thousands of Belizean-only websites
Chaa Creek is an award-winning luxury Belize Resort, rated as one of the worlds best Eco Lodges. We are a pioneer in adventure travel to Belize since 1981!
White Sands Dive Shop - 5 Star PADI Dive Facility - Daily diving, SCUBA instruction and Snorkeling
Caribbean Inspired All Natural Condiments & Spice Blends, Over 100 are Gluten Free!
We manage a variety of homes, apartments, condos and commercial properties here on Ambergris Caye. Our minimum lease on ALL properties is six months.
Conch Shell Inn: All rooms are right on the beach in the heart of San Pedro, so within walking distance to anything and everything!!
Lil’ Alphonse has snorkel equipment to fit anyone as well as Marine Park Tickets and flotation devices to assist those not as experienced.
Coastal Xpress offers a daily scheduled ferry run to most resorts, restaurants and private piers on the island of Anbergris Caye. We also offer  private and charter water taxi service.
Mini Chat

Cayo Espanto
Click for Cayo Espanto, and have your own private island
More Links
Click for exciting and adventurous tours of Belize with Katie Valk!
January
S M T W T F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31
Who's Online
0 registered (), 45 Guests and 5 Spiders online.
Key: Admin, Global Mod, Mod
Forum Stats
18,711 Registered Members
44 Forums
64,327 Topics
463,084 Posts

Most users ever online: 1,262 @ 06/10/07 07:16 PM




AmbergrisCaye.com CayeCaulker.org HELP! Visitor Center Goods & Services San Pedro Town
BelizeSearch.com Message Board Lodging Diving Fishing Things to Do History
BelizeNews.com Maps Phonebook Belize Business Directory
BelizeCards.com SanPedroDaily.com Picture of the Day

The opinions and views expressed on this board are the subjective opinions of Ambergris Caye Message Board members
and not of the Ambergris Caye Message Board its affiliates, or its employees.