Moody's Revises Belize Outlook to Negative

Moody's Investors Service revised its outlook on Belize's ratings to negative from developing, after the Central American government failed to make a payment on its bonds maturing 2029.

Belize currently has a foreign currency rating of Ca, which denotes highly speculative credit.

The outlook revision comes a day after Belize's government failed to make an interest payment, giving the government and its lenders until Sept. 19 to agree on a restructured bond. Belize is in talks with investors to negotiate how to restructure the country's only bond, however the creditors haven't agreed to the country's proposal that includes either forgiving 45% of what they are owed, or delaying payments for 15 years.

The missed payment prompted fellow ratings firm Standard & Poor's to lower Belize's rating to selective default from double-C. Both Moody's and S&P have issued several downgrades on Belize this year, citing concerns about the possibility of another debt restructuring there.

Moody's now expects that the government to formally default following the expiration of a 30-day grace period, unless a restructuring agreement is reached before then. The ratings firm said the fundamental driver of the restructuring process continues to be a deterioration in the government's willingness to service its external debt.

Wall Street Journal