Belize seeks to delay debt payments until after election

The Government of Belize today announced its intention to seek the consent of holders of Belize’s U.S. Dollar Bonds due 2034 (the “Bonds”) to the capitalization of interest payments falling due on the Bonds through February 20, 2021.

The COVID-19 pandemic has had a devastating effect on Belize’s economy. In recent years, Belize’s tourism industry accounted for approximately 60% of the country’s foreign exchange earnings; however, tourism has collapsed due to the rapid deterioration of worldwide economic conditions and the lockdown measures imposed by many countries, including Belize, to slow the spread of COVID-19. Preliminary indications are that Belize’s real gross domestic product will contract by as much as 18% in 2020.

The Belize financial authorities will be discussing this request, and the circumstances giving rise to it, with holders of the Bonds over the next two weeks. A formal Consent Solicitation for temporary capitalization of interest is expected to be launched in early July. The next scheduled interest payment on the Bonds is due on August 20, 2020.