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#447904 10/03/12 07:02 AM
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Prime Minister Dean Barrow and most of the Debt Restructuring Team returned from Washington DC today.

As we reported last week, the PM led a delegation to high level meetings with Executives at the IDB and IMF. Our reports were that the PM was going to lend his influence to try to swing support for a partial IDB guarantee of the debt re-structuring.

But today, upon his return the PM was far more circumspect in his remarks about the outcome of the meeting:..

Hon. Dean Barrow, Prime Minister
"The idea was to brief them on how the restructuring process is going and to discuss with them the roles that both institutions can play particularly in a post restructuring scenario. We clearly will need technical assistance, we will need project funding, we will need all the other resources that these international financial institutions can provide as we seek after the restructuring to maintain debt sustainability to maintain fiscal viability. That was what the trip was about. We had very useful discussions at the two institutions and I thought personally that it was in fact a productive journey."

Daniel Ortiz
"The information coming to us is that your trip was to seek a partial guarantee on the bond restructuring."

Hon. Dean Barrow, Prime Minister
"The request that the IDB look at a partial guarantee, that is limited to the IDB, has been on the table almost from the start of this process. I want to stress that that's not the only role that we see the IDB playing - in so far as that its concern the process is ongoing. Again it's not something that can be very quickly rap-up. There are all these internal protocols that the bank to be followed. I think we can indicate that certainly in so far as the technical preparation of this instrument, of this proposed instrument of the partial guarantee is concern those are proceeding apace at the IDB."

Daniel Ortiz
"Are these two institutions - how do they feel about the bond restructuring process as it is currently at the moment?"

Hon. Dean Barrow, Prime Minister
"Certainly the IMF will not comment on the negotiations between Belize and the bond holders nor will the IDB for that matter. I think both institutions though recognize that debt sustainability is in fact part of at this moment the fundamental economic and national interest of the country. Both institutions having done their assessments on a continuing basis of Belize macro-economic situation are aware that there is not just a need but a requirement for debt restructuring but there is no way they are going to comment on or even inquire too closely into the details of the negotiations that are taking place between Belize and the bond holders."

The Prime Minister and his team met with President Moreno of the IDB and the second in charge of the Western Hemisphere Department for the IMF.

Channel 7

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Belize PM aims for creditor superbond deal within month

Belize hopes to strike a deal with creditors to restructure its $550 million 'superbond' within a month, Prime Minister Dean Barrow said on Tuesday.

The tiny Central American country missed a $23.5 million interest payment on the sovereign bond in August and made a partial payment of $11.7 million on Sept. 20 when a 30-day grace period ended.

Creditors agreed in September to grant the country a second 60-day grace period as a sign of good faith as talks continue.

"We actually hope we can reach a point with the bondholders where we can launch the debt exchange offer by the end of October ... not later than very early in November," Barrow told Reuters. "I don't see any difficulty we would have in meeting those deadlines."

After the interest rate on the superbond rose to 8.5 percent this year from 6 percent, Belize said it could not afford to service its debt. The country is reliant on tourism, fishing and farming and cited increased fiscal liabilities from declining oil revenues and recently nationalized utility companies.

The Belize government has laid out three proposals for rescheduling its bond payments, shocking analysts with its suggestion that they take a haircut of up to 45 percent on their investment.

The country of roughly 350,000 has asked the Inter-American Development Bank for a partial guarantee on its debt and Barrow ruled out any possibility of a bailout from the International Monetary Fund.

"It is well known that we have asked for a partial guarantee (from the IDB)," Barrow said. "There is no question whatsoever of Belize needing or asking for IMF assistance."


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Belize Negotiating Debt-Restructuring Proposal with Creditors

Belize and its creditors are negotiating a debt restructuring proposal, according to a statement posted to the website of the country's central bank.

Belize defaulted in September, a month after it failed to make a payment on its $548.3 million debt.

The government and its creditors have been negotiating for several weeks, but the statement, posted Tuesday, was the first public sign of progress.

"I think at this point they're getting ready to formalize an offer," said Edward Al-Hussainy, an analyst at Moody's Investors Services. He said he expects Belize to make a public restructuring offer to investors before the end of the year, and as soon as this month.

When Belize last restructured its debt in 2007, the Central American nation floated a restructuring proposal before investors in private meetings before announcing the offering's terms to the public, in an effort to ensure it had a deal that would be well received, Mr. Al-Hussainy said.

One factor that could strengthen Belize's hand is if it can secure a partial guarantee for its bond payments from an international institution like the Inter-American Development Bank or the Caribbean Development Bank.

Earlier this week, Prime Minister Dean Barrow met with officials from Inter-American Development Bank in Washington, according to his secretary.

The Inter-American Development Bank confirmed that Belize has requested financial assistance.

"As is customary when borrowing members request assistance, the IDB is engaging in a dialogue with the Belizean authorities regarding alternatives for support," the bank said.

In the past five years, Belize has received about $100 million from the bank, according to the bank's website.

It isn't uncommon for international institutions to guarantee the debt of emerging nations. In March, the Caribbean Development Bank partially guaranteed the bonds that St. Kitts and Nevis issued in the restructuring of its sovereign debt.

A.J. Mediratta, co-chair of the creditors' committee that holds more than 50% of the outstanding bonds, confirmed that "active discussions" are taking place.

Belize Financial Secretary Joseph Waight couldn't be reached for comment Wednesday.

Mr. Al-Hussainy said that before agreeing to guarantee any payments, the Inter-American Development Bank will be looking to see how large a principal reduction Belize can negotiate to ensure that the new debt arrangement is sustainable.

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PM Says Ashcroft Alliance Trying to Torpedo Superbond 2.0

And there's one more bit of news coming out of today's event. The PM also discussed the progress - or lack thereof - with the superbond negotiations.

The Opposition went all Chicken Little on it earlier this week - but the PM, while not overly-enthusiastic, showed cautious optimism.

Hon. Dean Barrow, Prime Minister
"I see that we have been scolded for not keeping you sufficiently informed about super bond re-structuring. The report could be summarized very shortly - the negotiations are ongoing."

"On August 8 our liability management team published three options for a sustainable debt exchange offer. These indicative scenarios have formed the basis for ongoing negotiations with a Creditor Committee and with non-Committee Bondholders over the last 10 weeks - nobody ever said it would be easy, the negotiations continue."

"I go up to Miami this weekend to meet with our advisors preparatory to a face to face meeting that they will then have with the people representing the creditor committee."

"As the negotiations proceed, our stance remains resolute: for any outcome to be acceptable, it must be based on reasonable, realistic and-above all-sustainable assumptions."

Jules Vasquez
"To what extent is the bond re-structuring efforts and specifically the dialogue with the IDB and the re-structuring on the guarantee? To what extent is that being undermine by functionaries if the Ashcroft axis in trying to lobby against Belize's best effort?"

Hon. Dean Barrow, Prime Minister
"To a great extent. I went to Washington; they went immediately behind me, sort meetings with the fund, with the bank. They have been active among creditor ranks, among bond holder ranks trying to persuade people not to come to terms with us. That is why Dean Boyce could have filed an affidavit in the court of appeal saying that the negotiations were not going successfully - that was wishful thinking or that was his describing as fact what he hope would happen."

"This group of the members of the Ashcroft Alliance making the rounds has now included Stan Marshall. So there is no question at all but that they continue with their serial efforts to fundamentally undermine at the best interest of this country. I have no doubt that we are going to prevail one way or another."

Usually, a partial IDB guarantee would only come with an IMF standby arrangement - which the Government of Belize has staunchly resisted.

Channel 7

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Belize rejects new payments without debt deal

Belize will not make any more payments on its debt before a restructuring deal can be reached with creditors, Prime Minister Dean Barrow said.

In a speech to businessmen Thursday, Barrow rejected the idea of another partial interest payment while talks go on with lenders over its $544 million in debt.

"The government of Belize has made a partial payment on the coupon as a sign of good faith in August, but will make no further payment before an equitable agreement is reached with bond holders," he said, according to a text of his address obtained by AFP.

In September, the small Central American country made an $11.7 million interest payment, only half of what it owed but enough to avoid full-blown default after missing a deadline for repayment a month earlier.

"As negotiations continue, our position remains firm," said Barrow.

"To achieve an acceptable solution, it must be based on conditions that are reasonable, realistic and especially sustainable," he said.

After Belize made the partial payment, a committee representing a group of bondholders said it would not go to court for an additional 60 days to allow room for negotiations on debt restructuring.

The government has proposed rescheduling debt payments over 50 years at a lowered rate of two percent, a position analysts have qualified as extreme.


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Prime Minister and Minister of Finance Dean Barrow revealed at the Second Business Forum held at Old Belize this morning that the International Monetary Fund (IMF) is presently in town - on a dual mission.

The last Article IV Executive Board Consultation with Belize was on October 21, 2011, according to the IMF's website. The 2012 mission has begun, and the IMF team is due to meet with officials from the Belize Ministry of Finance on Monday, November 5, 2012, an official in the Ministry told us.

Barrow also announced this morning that experts from the IMF's capital markets division are already in-country to execute their mission, simultaneously with the 2012 Article IV review, to provide technical assistance for Belize, at the country's request.

Whereas Barrow said that Belize has sought the assistance of the IMF to review our entire tax system and to make recommendations for its restructuring and improvement, he said that the IMF's "special technical assistance" is focused on bolstering Belize's debt management capacity.

The debt restructuring scenarios released by the Ministry of Finance in August have formed the basis for negotiations with creditors who have subscribed to the US$544 mil super-bond, Barrow said.

He announced this morning that he is travelling to Miami this weekend, ahead of the meeting with the IMF, to meet with Government's US financial advisors, preparatory to a face-to-face meeting the advisors will have with representatives of the creditor committee.

"I want to make clear that our stance remains altogether resolute: For any outcome to be acceptable, it must be based on reasonable, realistic and sustainable assumptions," said Barrow.

Coming out of last year's consultation, the IMF noted the deterioration in Belize's debt profile, especially due to contingent liabilities accrued in the process of the nationalization of Belize Telemedia Limited (BTL) and the Belize Electricity Limited (BEL).

The IMF again recommended that Belize should increase the rate of General Sales Tax (GST)-a consumer tax-to the regional level of 15%. This morning, Barrow pointed to "declining net yields [in GST receipts] in the face of increasing transactions volumes." He said that Belize had asked the IMF for help with tax reform as well.

"We made this request some time ago, and there had been some delay in the IMF's response owing to pressure for the same service from other member countries. I met with senior Fund staff on another matter about a month ago, and the tax review for Belize is now a priority item," said Barrow.

The IMF team meets first with the government's finance team, before it extends its consultations to the Central Bank, the commercial banks, private sector organizations such as the Belize Chamber of Commerce and Industry, and other stakeholders.

The IMF mission in Belize should last roughly two weeks, the Ministry official told us.


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Belize PM rushes to solve debt crisis, meets US advisors

Prime Minister of Belize Dean Barrow is scheduled to meet with financial advisors in the United States this week to discuss the restructuring of the country's multi-million dollar foreign debt.

The meeting is scheduled to take place in Miami, starting tomorrow.

It comes a week after the country's main opposition, the People's United Party, claimed that negotiations had stalled between the government and international creditors on the so-called super bond.

Even before the meeting, however, there were reports that a team from the International Monetary Fund (IMF) was in Belize to review the government's capacity to meet its debt obligations.

Last week, Prime Minister Barrow met with members of the private sector to discuss economic issues and the second annual economic forum.


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from friends...

Three factors affecting restructuring.

1. New World CEO is projecting US$8.2 billion at Blue Creek
within the next year.

2. A Court in New York on October 26 ruled that you cannot discriminate against
different creditors by making payments on restructured debt while refusing to pay holders of its defaulted bonds.
Now the IDB and the IMF is taking a hard look at what this means because by them offering a guarantee for the Belize debt
they assumed that by convention they are "senior" in any loan now the court seem to be saying 'preferential payments' is a no no ..

3. BTL nationalization.

The investors strategy is to buy time and they only have one way to do that and time is our enemy.
In less than 2 weeks the 60 day window will come to a close and we expect Belize to announce a default or that we have successfully restructured the superbond.
We also have another possible outcome and if that is the case we might as well call it a day.


Pending the IMF report delivered this week i suspect we have
40% chance of a workout
40% chance of default
20% chance we will make another partial payment within 2 weeks so as to buy time.

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Jamaica Bond Yields Jump to Nine-Month High After Belize Default

Jamaica's borrowing costs are surging to the highest level in nine months after defaults by two Caribbean neighbors combine with the region's slowest economic growth prospects to undermine investor confidence.

Yields on dollar bonds due in 2019 from the island nation, which restructured $7.8 billion of bonds almost three years ago, reached 8.31 percent on Oct. 31, the highest since February, and traded at 8.25 percent yesterday. Jamaican notes lost 0.9 percent in October, the worst performance among 15 Central American and Caribbean nations, according to JPMorgan Chase & Co. Bonds sold by Pakistan that carry the same B- rating from Standard & Poor's returned 6.3 percent.

While Jamaican yields are below the 13 percent level reached before its 2010 restructuring, some investors are concerned that Prime Minister Portia Simpson Miller's government will struggle with debt payments following Belize and Grenada's defaults this year, said Stuart Culverhouse, the chief economist at Exotix Ltd. in London. Jamaica's economy is forecast to expand 0.9 percent this year and 1.5 percent in 2017, the slowest pace in Latin America and the Caribbean, according to the International Monetary Fund. Central bank reserves fell by more than half since April 2011 to $1.1 billion in October.

Click here for the rest of the story in Bloomberg News

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Clock ticks on Belize debt restructuring

Latin America is no stranger to sovereign debt restructurings, boasting a long and inglorious history of governments reneging on their creditors. The latest is Belize, which defaulted on its international debts this summer.

Belize's $547m bond due in 2029 constitutes just over half of the country's total indebtedness, presently at about 70 per cent of the country's $1.4bn gross domestic product, according to central bank figures.

The bond is itself the product of a past debt restructuring in 2006-07, which consolidated the country's international debts into one instrument. However, the bond included provisions for its payments to increase over time, and earlier this year the coupon rose to an annual 8.5 per cent.

Belize's government - headed by prime minister Dean Barrow - decided that the coupon increase was too painful, given its forecasted Bz$75.2m ($38m) budget deficit in 2012-13, and started preliminary restructuring talks with its creditors.

Talks were initially testy, given bondholders' scepticism over Belize's lack of ability to pay, and the severity of three restructuring proposals tabled in August.

These offered a mix of haircuts, lower coupon payments and repayment extensions, which would have meant overall writedowns of 70-80 per cent, according to analysts. In Argentina's contentious $100bn restructuring, creditors got between 25 to 29 cents in the dollar.

"The scenarios presented by Belize are no better than what creditors got from Greece, and that was a far worse crisis, and they were worse than for Argentina," notes a person close to the bondholders.

The restructuring talks soured further when Belize missed a $23m coupon payment due on August 20, pushing the bond into a default. Premier Barrow argued that the country could not pay the coupon due "given the financing shortfalls and other challenges we face", but the decision angered bondholders, as it could lead to an acceleration of the bond repayment.

In September Belize paid half of the overdue coupon to ensure that the creditors committee - chaired by AJ Mediratta, a partner of US hedge fund Greylock - would agree not to seek "legal remedies" for a further 60 days to help the restructuring.

This has helped keep talks more cordial, according to people familiar with the process, but the clock is ticking on the debt restructuring negotiations.

"Restructuring discussions are always difficult," says Sebastian Espinosa, managing director at White Oak Advisory, a boutique that is advising the Belize government. "Talks are ongoing, but Belize is not going to impose a time frame on the them given that debt sustainability is at stake."

Bondholders, who are being advised by BroadSpan Capital, certainly expect sweeter terms to be presented.

The price of the security plunged when the three proposals were presented, but has since recovered to just over 40 cents in the dollar. Time will tell if the restructuring ends on a better note than it started.


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