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Will the Super Bond be Restructured for a Fifth Time? #550033
05/07/21 04:41 AM
05/07/21 04:41 AM
Joined: Oct 1999
Posts: 74,220
oregon, spr
Marty Offline OP

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Marty  Offline OP

There are questions tonight about Belize’s homegrown economic recovery plan after Reuters news agency is reporting that creditors have been urging Belize to agree to an I.M.F. program, and Belize is accusing its bond holders of cancelling a zoom call. When asked for comment today, Minister of State in the Ministry of Finance Chris Coye told news five he was out of the country, but believed the Prime Minister would be addressing the matter soon. The Briceño administration which took office in November 2020, is attempting to restructure its external debt obligation.  It is the fifth time in the past fifteen years that the country has reached out to its creditors in a bid to streamline the five hundred and fifty million U.S. dollar Super Bond.  The Super Bond which emerged in its first iteration in 2006-2007 presently contributes to one hundred and thirty-three percent of Belize’s GDP ratio.  In a recent country review, the International Monetary Fund described it unsustainable.  Belize’s economy has been severely affected by the COVID-19 pandemic and Prime Minister John Briceño has opted for a homegrown recovery plan, eschewing an I.M.F. prescription.  U.S.-based funds G.M.O. and Greylock, as well as London-based Aberdeen Standard Investments, all Super Bond holders, have collectively signaled, after forming a creditor committee, that they may not restructure with help from the U.N. financial agency.  When asked on March fifteenth about the bond payment that is due this month, here’s what the prime minister had to say.

Marleni Cuellar, Host, Open Your Eyes

“There’s a payment due in a few months, in May. And clearly from all you’ve outlined, we most likely will not be able to make that payment. Is that what you’re saying?”

Prime Minister John Briceño [File: March 5 th , 2021]

“Yes.”

Marleni Cuellar

“So what’s the status of the renegotiation?”

Prime Minister John Briceño

“I don’t think we’ve started the actual negotiations formally, but we have been sending out signals and so to the bondholders. There is absolutely no way that we can continue carrying that burden of over five hundred million U.S. dollars and the only way we can get back to sustainability is asking for bondholders to take a haircut and we are trying to get as a big of a haircut as we possibly can. The debt recovery team is just a team of different technicians and myself as well as with Ministers Courtenay and Coye. And so we are the ones that are working on putting all of these plans together.”

Marleni Cuellar

“Are you utilizing any of the past members of the recovery team; the past P.U.P. representative, the ambassador for Economic Affairs, Mark Espat? Is he involved?’

Prime Minister John Briceño

“Mark Espat is involved, but he is involved through the CITI Group. The CITI Group is the group that leads the negotiations. And so they are the ones that will have started that negotiations. We are not paying a cent to anybody as we speak and it will be based on performance and the amount of the haircut that we can get.”

P.S.U. Says Superbond May Be Affecting Talks

The reported pressure that G.O.B. is facing from superbond holders may also be having a rippling effect on ongoing negotiations with the joint unions.  Today, President of the P.S.U., Gerald Henry explained that the added external pressure may be causing the government to stick to the ten percent cut.

Gerald Henry, President, P.S.U.

“I would imagine that the pressure must be great on them for them to be sticking with the ten percent cut at this time. And so, that is the reason why the discussions have been very difficult, and we have not been able to move as fast as we would have liked. And so the pressure is on them I believe. But we are still hopeful that we will be able to breakthrough and get reduction in the ten percent. But we will have to wait and see.”

Channel 5


Re: Will the Super Bond be Restructured for a Fifth Time? [Re: Marty] #550059
05/11/21 05:02 AM
05/11/21 05:02 AM
Joined: Oct 1999
Posts: 74,220
oregon, spr
Marty Offline OP

.
Marty  Offline OP

Will GOB Default on Superbond on May 20th? Pay Cut Set in Stone

The government's top finance man is saying what's in the budget is basically set in stone - and there can be no retreat. And, as government enters the toughest phase of its negations with holders of the super bond - that's how it has to be.

There's no wiggle room because government is trying to get bondholders to accept a 30% haircut - and the next bond payment of about 7 million US dollars is due in 10 days.

Government isn't blinking though - it is insisting it has to get that haircut - and the possibility of a life default is real. Here's what the Minister of State for Finance told us today:

Christopher Coye, Minister of State, Ministry of Finance
"We are looking for relief. And if we are to get that relief that means that there will have to be a give. In any discussion or negotiation there will be a back and forth. It's not just an acceptance of what we want and that is the end of it. We would like that, but this is entirely expected and there is continuing engagement and there will be continuing engagement until there is a resolution that Belize agrees with."

Reporter
"So then, do you expect that this is going to go beyond the May 20th payment due date and what will happen with that payment, where do we find the money, do we have the foreign reserves, etc."

Christopher Coye, Minister of State, Ministry of Finance
"It's a process and we have to expect that it would go beyond May 20th. If the bondholders find that they would prefer to reach an agreement before May 20th then we wouldn't have a default."

Belize’s Bad Name As "Serial Defaulter"

But, that probably won't happen and we may well have a default. That's why the creditor committee representing bondholders is characterising Belize as a "serial defaulter."

That's the way international news reports are writing up the story - making it so that, in a manner of speaking, "Belize name sink da road."

Coye said it's regrettable but inevitable if the government of Belize is to focus on what's truly important:

Christopher Coye, Minister of State, Ministry of Finance
"The serial defaulter certainly doesn't sound good. I've never been a serial defaulter, but now looking at where we are as a country obviously there has been multiple restructurings of the bond and looking at the debt profile of Belize its certainly not commendable to see that we had a billion dollars in superbond debt back in 2008. And we have over a billion dollars in superbond debt in 2021. All that sound to me is that we've been paying interest for the last 12-13 years. Interest that we don't get back. That's gone. And we still owe in fact 1.1 billion dollars because we capitalize the interest last year. We owe 1.1 billion dollars. The bond holders are investors in this country and we do look at them as investors in this country, but we still have to give priority or rank in order of priority and when we rank in order of priority Belize comes first, not the investors."

Bondholders Pushing Belize to Embrace The IMF

But the investors aren't moved by language like that. They say the government of Belize has to make right by them - and after 5 restructuring exercises since 2008 - that means bringing in the IMF - because the bondholders can no longer trust the homegrown solution. Government says that indeed, it's strategy must change - but not to an IMF embrace:

Christopher Coye, Minister of State, Ministry of Finance
"What it has been no doubt has been a period of kicking the can down the road and in this administration we feel that cannot occur any longer and I think Mr. Ross would agree with that. It is just the mechanism by which we now deal with the problem that we have. We believe that our homegrown recovery plan is the best way to deal with it and he believes that the IMF approach is the best way. That's just where the difference of opinion is. I believe that looking at our plan, it has more of a conscience, if you will, than what an IMF approach would involve. The reality is we have a tough situation that we face, we are in an economic crisis and a fiscal crisis and the hard decisions have to be made to get us out of it and we feel that our homegrown plan is the best way."

Coye: Pay Cut Set In Stone

And like we said, a central component of that home grown plan is the pay cut and increment freeze for teachers and public officers, which will realise savings of 80 million dollars.

And, to hear Coye tell is, there's just no putting the toothpaste back into he tube when it comes to the pay cut:

Christopher Coye, Minister of State, Ministry of Finance
"The salary adjustment for this fiscal year is part of that fiscal recovery plan and its part of getting to a level of fiscal balance over a period of 3 fiscal years. One year doesn't do the job. We are in such deeper hole that it will take a while to dig ourselves out."

Jules Vasquez, reporter
"So that makes it irreversible, it has to go on as it has been programmed, as it has been written in the budget, as it has been passed by the parliament - because there are those in the union who feel that the government has the power to reverse it. But what you are saying is that we have a program and the program is that the cuts go into effect. That is irreversible, am I right?"

Christopher Coye, Minister of State, Ministry of Finance
"The budget has been passed."

Channel 7



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