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GOB Launches First Ever US dollar Treasure Note #542792
06/05/20 04:12 AM
06/05/20 04:12 AM
Joined: Oct 1999
Posts: 67,455
oregon, spr
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Marty  Online Happy OP

Belize's leading foreign exchange earner, tourism, is on an extended hiatus, and no one can say for sure when it will return.

In the interim, the economy is in a nosedive, and many are getting concerned - especially about foreign exchange shortages.

The banks are cutting back on credit card limits; last week we told you about Atlantic Bank, and today we saw that Heritage Bank was also cutting credit card spending to $5,000 Belize per month.

And that's why today, the business, institutional investor and expatriate community viewed with great interest the launch of an unusual and unprecedented monetary instrument by the government. It's a U.S. dollar-denominated, tax free Treasury Note - backed by the government of Belize, and those who invest in it will be able to hold US dollar accounts in Belizean Banks.

The Prime Minister explained this novel new instrument in a special message this evening, where ehe outlined the hard currency inflows that are now coming in from international financial institutions:

Rt. Hon. Dean Barrow - Min. of Finance

"In the next few days, the first disbursement from the IDB's package is expected; and thereafter, in rapid succession during the ensuing months, the flows will come from Taiwan, the World Bank and OFID, in a total amount of some US$100 million. These fresh inflows will augment the Central Bank's official reserve position, which currently surpasses the traditional 3 months of import cover. And the renewal of tourism earnings will commence during the third or, at the latest, fourth quarter of this year. I am pleased to announce now a ground breaking initiative by the Central Bank: the first-ever public placement of a U.S. dollar-denominated Treasury Note, backed by the full faith and credit of the Government of Belize. With a face value of US$30 million, a tenor of 5 years and a coupon of 6.5%, the special offering will be launched on June 05, 2020. Interest on the Note is to be paid semi-annually and principal redemption will be settled in three equal tranches at the close of Years 3, 4 and 5. Proceeds of the Note are purposed to augment the stock of official Central Bank reserves while the maturity is tailor-made to span the crisis. Hence the affordable principal payoff dates, positioned well beyond what we believe to be the temporary economic slump caused by the COVID-19 lockdown. To facilitate the remittance of interest and principal payments, successful purchasers of these Notes, whether individual, institutional or corporate, will of course be eligible for domestic U.S. dollar accounts. It is widely acknowledged that U.S. dollar accounts have been held abroad by Belizean businesses and individuals from time immemorial. This tax-free Treasury Note now has been crafted as an exceptional, seamless opportunity to relocate this capital to a safe, fixed income asset of the highest credit quality available in Belize."

Early indications are that the Treasury Note is generating interest in the business sector - but, of course, now we will have to wait and see when the IFI funds actually start coming in.

Channel 7


My fellow Belizeans,

Last week, when I provided an update on Government’s crisis response to COVID-19, I offered a reassurance of broad financial sector stability and, in particular, of continued commercial access to a sufficiency of foreign currency supply for essential imports.

The certitude I conveyed is sowed by a ceaseless, creative campaign to tap every available source of external financing in support of our economy.

In the next few days, the first disbursement from the IDB’s package is expected; and thereafter, in rapid succession during the ensuing months, the flows will come from Taiwan, the World Bank and OFID, in a total amount of some US$100 million. These fresh inflows will augment the Central Bank’s official reserve position, which currently surpasses the traditional 3 months of import cover. And the renewal of tourism earnings will commence during the third or, at the latest, fourth quarter of this year.

Over and above these three distinct layers of foreign exchange supply, I am pleased to announce now a groundbreaking initiative by the Central Bank: the first-ever public placement of a U.S. dollar-denominated Treasury Note, backed by the full faith and credit of the Government of Belize.

With a face value of US$30 million, a tenor of 5 years and a coupon of 6.5%, the special offering will be launched on June 05, 2020. Interest on the Note is to be paid semi-annually and principal redemption will be settled in three equal tranches at the close of Years 3, 4 and 5.

Proceeds of the Note are purposed to augment the stock of official Central Bank reserves while the maturity is tailor-made to span the crisis. Hence the affordable principal payoff dates, positioned well beyond what we believe to be the temporary economic slump caused by the COVID-19 lockdown.

To facilitate the remittance of interest and principal payments, successful purchasers of these Notes, whether individual, institutional or corporate, will of course be eligible for domestic U.S. dollar accounts. The Central Bank and our commercial banks will closely collaborate to ensure a subscription process that is both efficient and diligent.

It is widely acknowledged that U.S. dollar accounts have been held abroad by Belizean businesses and individuals from time immemorial. This tax-free Treasury Note now has been crafted as an exceptional, seamless opportunity to relocate this capital to a safe, fixed income asset of the highest credit quality available in Belize.

Beyond the innovation of this first-of-a-kind Treasury Note, Government and the Central Bank will continue to engage financial intermediaries and their customers, encouraging fair and timely measures that foster confidence, stimulate employment and protect equity.

I reaffirm, in closing, my unshakeable confidence that we will bridge this crisis. When our country reopens for transnational business, the medical success that together we continue to achieve in containing the COVID-19 virus, will unquestionably elevate the prestige and the premium of our Belizean brand.

I thank you.


Re: GOB Launches First Ever US dollar Treasure Note [Re: Marty] #542918
06/12/20 04:18 AM
06/12/20 04:18 AM
Joined: Oct 1999
Posts: 67,455
oregon, spr
Marty Online happy OP

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Marty  Online Happy OP
Applications roll in for US Treasury Notes

CENTRAL BANK of BELIZE PRESS RELEASE

US$30.0MN FIXED RATE NOTES

The Central Bank of Belize advises prospective subscribers and the public that the Government of Belize's offer of a US dollar-denominated Fixed Rate Note has been enthusiastically received both in Belize and the wider region. As the independent banker for the Government of Belize, the Central Bank issues Treasury Bills and Notes in accordance with the Central Bank of Belize and the Treasury Bills Acts and always within its authorized borrowing limits. This US$30mn 6.5% Fixed Rate Note falls well within the bounds of the Central Bank's existing debt authorization. Attracting added reserves by way of a foreign currency issuance has been under consideration for some time now, and the Covid-19 crisis magnified the need for foreign currency. This need led to the innovative opportunity to attract US dollar investments using a familiar and market friendly instrument at the disposal of the Central Bank. In designing this Treasury Note offering, the Central Bank and its Board of Directors, as is standard procedure, considered multiple, highly regarded legal opinions. The Central Bank wishes to underscore that the US-dollar proceeds of the Fixed Rate Note will buttress the existing portfolio of official foreign reserves, bolster the import cover for the national economy, and strengthen the peg.

The number of applications and serious inquiries, in just the first few days since the launch of the Note, indicate strong interest and the likelihood of a highly successful offering.

For further information on this US dollar-denominated Treasury Note, please contact the Central Bank's Investment and Reserve Management Unit at Telephone 223-6194, EXT 243 or 490.


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