Negative Reactions Towards GOB Restructuring Bond Options

But markets have reacted negatively to Belize's indicative restructuring proposals. Citigroup analysts describe Belize's options as a "threat of a credit event rather than a willingness to negotiate."

AJ Mediratta, a partner at Greylock Capital Management and chairman of the ad-hoc committee of holders formed a few months ago states an we quote "We previously communicated from the beginning that we are sympathetic to the challenges facing Belize and are prepared to work with the authorities in a consensual and collaborative manner. However, we do not consider the indicative scenarios released last week as the start of negotiations. This is the most organized and unified group of bondholders involved in a recent sovereign restructuring, and it is our position that we will respond to proposals that are clearly based on ability to pay using reasonable, mutually agreed assumptions as well as demonstrated burden sharing among commercial, bilateral and multilateral creditors and, importantly, the Government itself." End of quote

According to a recent report by Carl Ross for Oppenheimer "The proposed terms were significantly worse than most people expected, with a major lengthening of maturities and a drastic cut in coupon levels. These investors see neither the need nor the urgency for the scope of NPV haircut being offered by Belize, and Belize is likely to become a financial outcast in the region as a result." End of quote.

As it pertains to the nationalization of BTL and BEL, the release states "Belize's fiasco is that the 2029 bond is not the main debt problem faced by the government�rather the compensation that needs to be paid for the nationalizations, combined with amortizations due to multilateral and bilateral creditors, are the most onerous debt obligations over the next several years. The government unilaterally nationalized these companies; creating a huge contingent liability�it is difficult for bondholders to analyze this restructuring offer from the government without first knowing the size of the settlements to be paid to the former equity holders of the companies." End of quote.

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