INTER AMERICAN BANK APPROVES TWENTY FIVE MILLION DOLLAR LOAN FOR BELIZE
December 07, 2006

The Inter-American Development Bank has approved a 25 million-dollar loan for Belize. T he fast-disbursing loan is to support Belize’s agenda on reforms to restore macroeconomic and financial stability, improve its business climate, and bolster investor confidence.The loan is expected to improve our fiscal position and debt management.To boost revenues, government will introduce a new oil tax regime and implement a general sales tax. It will also proceed with an orderly liquidation of the loss-making D-F-C.The loan will be disbursed in two amounts. The Ministry of Finance will be responsible for carrying out the programme.The loan was granted for 20 years with a five-year grace period and a Libor-based interest rate.

GOVERNMENT TO ASK NATIONAL ASSEMBLY TO APPROVE NEW DEBT RELIEF PLAN
December 07, 2006

Government announced yesterday that it will ask the National Assembly to approve a new debt relief program.The National Assembly will be asked to approve financial terms of an offer to exchange most categories of Belize’ outstanding external commercial debt for new U-S dollar bonds.Government says that if the National Assembly approves, the exchange offer will be formally launched later this month. The financial terms are based on economic data and forecasts that have been published by the International Monetary fund as part of Belize’ most recent Article Four Consultation by the I-M-F, and take account of view expressed by creditors during a four-month period of consultations. Government is asking the National Assembly to approve the issuance of new bonds that will mature in 20-29, with principal payments beginning in 20-19.The New Bonds will bear interest in the first three years after issuance at a fixed rate of four-and-quarter percent per year. In years four and five, the rate will increase to six percent, and then level off at eight-and-a-half percent. The terms of the exchange offer are expected to provide that all creditors taking part will receive a cash payment at the closing of the transaction equal to unpaid interest on their tendered claims accrued through to the closing date. Interim debt service payments on the existing debts eligible for this exchange offer will cease immediately.