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Agreement in Principle on International Bonds, "Superbonds" #552471
09/04/21 04:38 AM
09/04/21 04:38 AM
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Posts: 75,685
oregon, spr
Marty Offline OP

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Marty  Offline OP
Belize Reaches an Agreement in Principle with a Committee of Holders of a Substantial Portion of Its International Bonds

Following six months of intensive discussions, the Government of Belize ("Belize") has reached an agreement in principle with a committee of institutional investors (the "Committee") comprising Aberdeen Standard Investments, Grantham, Mayo, Van Otterloo & Co. LLC and Greylock Capital Management, LLC. The investors that have appointed the Committee hold close to 50% of the outstanding principal amount of Belize's U.S. Dollar Bonds due 2034 (the "Bonds"). Belize and the Committee have agreed in principle on key indicative commercial terms of a forthcoming cash tender offer (the "Offer") and consent solicitation, through which Belize will seek to purchase, redeem and cancel all of the outstanding Bonds. Such amendments are expected to become effective on the settlement date.

The key features of the agreement in principle that Belize has reached with the Committee are as follows:

1. Tender Consideration: Eligible holders who tender their Bonds prior to the expiration date of the Offer will receive, on the date of settlement, a cash payment in an amount equal to $550 per $1,000 of the outstanding principal of the Bonds as of September 1, 2021 comprised of (i) $517 per $1,000 of the outstanding principal of the Bonds as of September 1, 2021 (such amount, the "Purchase Price") plus (ii) $33 per $1,000 of the outstanding principal of the Bonds as of September 1, 2021 (in lieu of accrued and unpaid interest on the Bonds calculated through October 19, 2021) (such amount, the "Accrued Interest Payment");

2. Redemption of Non-Tendered Bonds: Subject to consents from eligible holders of more than 75% of the aggregate principal amount outstanding of the Bonds, Bonds held by eligible holders who do not tender prior to the expiration date of the Offer will be redeemed in cash (the "Redemption") on the date of settlement, with a cash payment equal to $517 per $1,000 of the outstanding principal of the Bonds as of September 1, 2021 and will not receive the Accrued Interest Payment;

3. Contingency Account: In addition to the cash payments described above, as provided in the existing trust indenture, all eligible holders will be entitled to a cash payment of approximately $1 per $1,000 of the outstanding principal of the Bonds as of September 1, 2021, which will be equal to such holders' pro rata share of the aggregate amount in the contingency account held by the trustee under the trust indenture;

4. Marine Conservation Endowment Account: Belize has committed, as an integral part of the transaction, to prefund in full (in the amount of $23.4 million), at settlement, a Marine Conservation Endowment Account. This endowment account, which will be administered by an affiliate of The Nature Conservancy ("TNC"),will be devoted to supporting future marine conservation projects in Belize; and

5. Expenses: Belize has agreed to reimburse, on the date of settlement, reasonable and documented fees and expenses of legal counsel to the Committee up to a certain amount.

Belize expects to launch the Offer in the short term, subject to the finalization of an Offer to Purchase and Consent Solicitation Statement, and will seek the support of all other eligible holders of the Bonds.

Belize expects to finance the purchase of the Bonds with funding provided by TNC in connection with their Blue Bonds for Ocean Conservation program (the "Blue Bonds Financing"), which uses private capital to refinance public debt of participating countries in order to support durable marine conservation efforts and sustainable marine-based economic activity. Belize's offer to repurchase the Bonds for cash will be conditional on the consummation of the Blue Bond Financing. As part of the Blue Bonds Financing, Belize would accelerate its marine conservation commitments, including enhanced protections for its coastline, reef and ocean territory as well as the funding of an endowment to support future marine conservation projects in Belize. Belize has reached agreement in principle regarding the key commercial terms of the Blue Bonds Financing with TNC, and with Credit Suisse Group AG and/or its affiliated entities, which is arranging the Blue Bonds Financing. The U.S. International Development Finance Corporation is expected to provide political risk insurance in connection with the Blue Bonds Financing. The parties are working to finalize the definitive documents and consummate the Blue Bonds Financing.

In addition to the consummation of the Blue Bonds Financing, the consummation of the Offer and the Redemption is subject to the satisfaction of certain conditions, including the receipt of valid tenders and consents from eligible holders of more than 75% of the aggregate principal amount outstanding of the Bonds.

The deadline for Belize to settle the offer will be November 19, 2021, which is intended to provide time for the parties to finalize the definitive documentation and consummate the Blue Bond Financing.

If the Offer is consummated, Belize will retire all its outstanding Bonds through the Offer and the Redemption (facilitated by the use of the collective action clause provision contained in the trust indenture). The resulting cash flow savings will materially assist in the alleviation of the devastating consequences of the COVID 19 pandemic as well as help to achieve important environmental conservation goals. Further, the consummation of the Offer, together with Belize's Homegrown Economic program and fiscal consolidation, will pave the way for strong and long-lasting economic growth and the furtherance of critical marine conservation objectives.

Important Notice

This press release is for informational purposes only and is not an offer of securities for sale in the United States or a solicitation of consents of any holders of securities, and none of the Bonds has been or sill be registered under the Securities Act of 1933 (the "Securities Act") or the securities laws of any other jurisdiction Unless they are registered under the Securities Act, the Bonds may be offered only in transactions that are exempt from registration under the Securities Act. This press release does not constitute an offer of the Bonds for sale, or the solicitation of an offer to buy any securities, in any state or other jurisdiction in which any offer, solicitation or sale would be unlawful. This press release does not constitute, and may not be used in connection with an offer or solicitation in any place where offers or solicitations are not permitted by law

This press release and any other documents and/or materials relating hereto is not being made and the press release and such documents and/or materials have not been approved by an authorized person for the purposes of section 21 of the Financial Services and Markets Act 2000 Accordingly, this press release is not being made and related documents and/or materials have not been distributed and must not be passed on, to persons in the United Kingdoms ("UK") other than (i) persons falling within Article 43(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), including existing members and creditors of Belize or (ii) any other persons to whom they may otherwise lawfully be made or distributed under the Order (all suchpersons described in (i) and (ii) above together being referred to as "Relevant Persons In the UK any investment or investment activity to which this press release or any related documents and/or materials relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. Airy person in the UK who is not a Relevant Person should not act or rely on this press release or any related documents and/or materials or any of its or their contents.

NONE OF BELIZE OR ITS ADVISORS NOR ANY OF THEIR RESPECTIVE OFFICIALS DIRECTORS, EMPLOYEES; AFFILIATES, AGENTS OR REPRESENTATIVES HAVE MADE ANY RECOMMENDATIONAS TO WHETHER HOLDERS SHOULD PARTICIPATE INANY CONSENT SOLICITATION OR TENDER OFFER THAT MAY BE ANNOUNCED BY BELIZE.

Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are forward-looking statements. These statements are based on expectations and assumptions on the date of this press release and are subject to numerous risks and uncertainties, ',Mich could cause actual results to differ materially from those described in such statements. Risks and uncertainties include, but are not limited to, market conditions, and factors over which Belize has no control. Belize assumes no obligation to update these forward-looking statements, and does not intend to do so, unless otherwise required by law

Questions regarding this press release may be directed to Joseph Waight (email: [email protected]; telephone +501 822 3866).

Re: Agreement in Principle on International Bonds, "Superbonds" [Re: Marty] #552474
09/04/21 04:48 AM
09/04/21 04:48 AM
Joined: Oct 1999
Posts: 75,685
oregon, spr
Marty Offline OP

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Marty  Offline OP

Free At Last, ďSuperbondageĒ At An End

The "Superbond" - 7News coined the term back in 2006 - when the then Musa Administration amalgamated all their expensive commercial debt - 1 billion Belize dollars at the time - and packaged it off into a single lower interest bond offering.

Well, tonight we are happy to report that 15 years later - we'll soon be able to retire the term "Superbond" - because government is buying it all back - at a huge discount.

Now, you're probably asking what they are buying it back with - since government is so broke. Well it's a unique arrangement - called a Blue Bond - where the Washington based Nature Conservancy is basically finding the money for government to buy out the bondholders - and pay back the reduced principal at a lower interest rate over a longer period of time.

For the 572 million US dollar Superbond, which has been renegotiated twice since it was launched in 2006 - this is an end to a rocky road which will bring relief to both the broke government and the beleaguered bondholders.

First, government is buying back the bonds at a significant discount, about 55 cents on the dollar - and it will amount to a savings of a minimum of 225 million US dollars - almost half a billion Belize dollars. The interest rate on the new Blue Bond - is also expected to finish up at somewhere between 3 and 4% - whereas Government is now paying 5%. The term on the re-payment is also expected to be extended by 7 years.

So, a winning deal for Belize - hundreds of millions saved in principal and interest - but the numbers part of it doesn't tell the full story - the broad arc is that Belize is getting this deal to enhance its marine conservation efforts.

A press release says "Belize has committed, as an integral part of the transaction, to prefund in full (in the amount of $23.4 million), at settlement, a Marine Conservation Endowment Account (which)…will be devoted to supporting future marine conservation projects in Belize.

And, this is the heart of the deal - The Nature Conservancy is sourcing the funding for Belize to purchase the Bonds. It's part of a wider program called "Blue Bonds for Ocean Conservation which uses private capital to refinance public debt to support marine conservation efforts and sustainable marine-based economic activity." From what we are told, this is the largest sovereign debt restructuring ever to use this Blue Bond model.

And while it all looks good on paper - there are still two more critical steps to go. First, government - working with the Nature Conservancy - has to secure the 370 million US dollars to buy the bonds and settle all closing costs, and then they have to get 75% of the bondholders to agree to this new deal - currently about 50% have said they support it.

But, even with just the broad outline it's a major reset and a landmark accomplishment. And today at the Hose of Representatives in Belmopan, the Prime Minister said it was a long process of negotiation:

Hon. John Briceno, Prime Minister
"The first point I want to make that this had been a long drawn out process between the committee of the bondholders and the government of Belize in trying to come up with an agreement to renegotiate the superbond. This is just the first step and I must say I am very proud of our team that we worked very hard. I promised the Belizean people that we were going to find how we can renegotiate this superbond to be able to find savings and relief for the Belizean people. The second point at the moment we are still finalizing the financial aspect on how we're going to finance this transaction. We are confident that we are going to accomplish that. And the third point is that for us to consummate this deal, we must have a 75% buy in of the bondholders. Now this is the best deal that we can offer to the bondholders and it's either all in or nothing so I just want to make it very clear that we hope and expect that we could reach the 75% threshold so by doing that we can get rid of the entire super bond and come up with what we call now the blue bonds that we will be moving it from that once we do the financing and all that but I just want to reiterate that this is the best deal we can offer to the bondholders."

Reporter:
"How important is TNC in this deal?"

Hon. John Briceno, Prime Minister
"TNC, through their efforts and with credit we are working on the financing of this deal, but I'll be able to give more details, exciting things that will happen once that is consummated next week."

"Our forests is not going to be held in trust its going to be more marine conservation and it's going to be conservation beyond the reef, into our exclusive economic zone."

Channel 7


Re: Agreement in Principle on International Bonds, "Superbonds" [Re: Marty] #552542
09/08/21 04:32 AM
09/08/21 04:32 AM
Joined: Oct 1999
Posts: 75,685
oregon, spr
Marty Offline OP

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Marty  Offline OP

Prime Minister Hon. John BriceŮo addresses the nation on major breakthrough in the bond negotiation.


PM Celebrates Blue Bond

Prime Minister John Briceno today released an address to the nation discussing the historic retirement of the Superbond. As we told you, government is buying it over - for cents on the dollar - and they're getting the funds to do that from what's called a Blue bond - a unique instrument derived from the value of Belize's marine resource.

The PM discussed the savings to Belize in the 9 minute statement:

Hon. John Briceno - Prime Minister

"This deal calls for a 48.3% discount to the face value of the super bond for those holders that tenders viewing the offer period a payment in lieu of accrued interest on the bonds. The government proposes to raise the money for the discounted repurchase through a loan from an affiliate of the nature conservancy. In connection with that loan, government will accelerate it's marine conservative policies in a manner that will dramatically enhance the preservation of Belize's precious seas, coral reefs and fish stocks. Belize's public debt will be instantly reduced by almost 500 million Belize dollars. To put this in perspective, 12 cents of every dollar of the public debt will be eliminated. This arrangement will also direct on average 8 million Belize dollars annually to marine conservation projects and upgrading the protection and management of our marine patrimony. Government proposes to capitalize a marine conservation endowment, who's investment earnings over the next 20 years will grow to 184 million Belize dollars. This endowment has been designed to ensure conservation project in perpetuity. In the short term, under the existing terms of the super bond, Belize would have been required to pay some 245 million dollars in interest alone during the 5 year term of our administration. With our proposals government will pay 115 million dollars in interest, thus generating cash flow savings of 130 million Belize dollars. Even after netting out the anticipated cost of the funding requirement for this operation, we expect that canceling the super bond will save for the Belizean tax payer more than 530 million Belize dollars in gross debt repayments. My administration promised you debt reduction and debt relief, this proposal delivers both in spades."

The PM stressed that it is not yet a done deal - as government has to get the support of 75% of the bondholders - it currently has close to 50%.

Channel 7


Re: Agreement in Principle on International Bonds, "Superbonds" [Re: Marty] #552570
09/09/21 04:44 AM
09/09/21 04:44 AM
Joined: Oct 1999
Posts: 75,685
oregon, spr
Marty Offline OP

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Marty  Offline OP
Belize Had to Build Credibility with Super Bond Holders

The proposed agreement between the government and the Creditorsí Committee for the holders of the super bond developed during eight months of negotiations. When he appeared on Open Your Eyes this morning, Minister of State in the Ministry of Finance, Chris Coye said first the government had to build credibility, illustrated through tough decisions to address the nationís fiscal challenges and Belizeís homegrown recovery plan. The salary cut for teachers and public officers was one of those choices that he said the government had to take from early on as part of that plan to rescue the economy. Those measures, he said, put us in a better position to negotiate with the bondholders.

Chris Coye, Minister of State, Finance


ďAs we started our negotiations with bondholders, we went through a process where we put forward a bond exchange offer first. We didnít go with a cash offer. Then when we engaged with the TNC, and we reached a point where we felt that we could integrate both processes, thatís when we went with that cash offer with the TNC. If you recall, in the very early days of the administration, we went through a process at the Senate of ratifying the New York Convention on Foreign Arbitral Awards, and there was all this concern over what it really meant and all of that. That was a significant part of going through the TNC negotiations. That represented an opening for us to get political risk insurance from the U.Sís International Development Finance Corporation. Without that ratification, we would not have been eligible for that political risk insurance. So that, in effect, was a signal that we were already negotiating with them from way back then.Ē

Super Bond Holders Offered Incentives

Coye went on to explain what the formal offer will be that the government will launch on the Super Bond on Thursday. Included in it is an incentive for bondholders who sign on to the governmentís offer.

Christopher Coye, Minister of State, Finance


ďWhat that offer will be is fifty-five cents on the dollar. That fifty-five cents is split into two components: fifty-one point seven cents will be the principal component, the principal haircut; and the three-point three cents that add up to that fifty-five cents is the past-due interest. Remember government hasnít paid interest for roughly a year now, so that has added up and is due. What the proposition is, once the offer is launched, is for us to try and reach that seventy-five percent threshold by November nineteenth. Between, letís say, tomorrow and November nineteenth the bondholders will have the opportunity to sign up to that offer. If they do sign up to that offer, they will get the full fifty-five cents, including the past-due interest. If we reach the seventy-five percent threshold before November nineteenth, and you, a bondholder, didnít sign up by November nineteenth, you will not get that three point three cents on the dollar. This is cash that will come from a third party. We donít have that cash, so from our Ė in this scenario, we have already negotiated as best as we can with the TNC and Credit Suisse, who is really the underwriter, to get those funds. We are at the same time looking at our ability to service that debt. So, where we are as a government, weíre on the edge with the TNC as to what they are prepared to put out Ė or what Credit Suisse is prepared to put out. We canít go any further. This is the best that we can offer to the bondholders. If the bondholders donít take up this deal, I donít know Ė TNC withdraws from the table, I donít know how we will service the super bond.Ē

Former PM Weighs in on Super Bond and TNC Agreement

The albatross that is Belizeís massive external debt is a collective burden, some of which may be lifted off our shoulders in the weeks ahead, thanks to a new agreement being hammered out with bondholders. While he is yet to be given the specifics, former Prime Minister Dean Barrow welcomes the arrangement.

Dean Barrow, Former Prime Minister


ďI think itís a good thing, subject to certain caveats, but I think it would be an excellent thing if this could be consummated. It would remove this Damocles sword from over their heads of the Belizean public. I donít know all the details of the preliminary agreement, but for sure TNCs raising of the money to buy out the bonds would mean that, not necessarily that government and people would not have to pay back that money to TNC. They would become the owners of the bonds and we would still have to service that payment, but in Belize dollars. And in any event, it would be at a savings apart from the foreign exchange relief, which we desperately need and which we would get. I believe the terms of payment would be less onerous by far than the terms of payment that currently govern the bond when the bond is owned by foreign bond holders. So, I think it would be a wonderful coo, a wonderful achievement for the government and people of Belize, and I hope, sincerely that it does absolutely materialize.Ē

Channel 5

Re: Agreement in Principle on International Bonds, "Superbonds" [Re: Marty] #552673
09/14/21 04:53 AM
09/14/21 04:53 AM
Joined: Oct 1999
Posts: 75,685
oregon, spr
Marty Offline OP

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Marty  Offline OP
Belize Commences Offer to Buy Superbond

Today, the government announced that Belize has officially commenced an offer to buy back the super bond, and the solicitation of consents from bondholders. Through the arrangement, Belize is proposing to finance the purchase of the bonds through funding via The Nature Conservancy. TNC uses private capital to refinance public debt in support of marine conservation efforts and eco-friendly sustainable marine-based activity. As a part of this, Belize will fund a twenty-three point four million-dollar marine conservation trust that would help protect the coral reef which has seen significant damage in the past. Under the proposed deal, eligible holders who tender their bonds will receive fifty-five cents for every dollar in outstanding principal. The U.S. five hundred and twenty-six point five-million-dollar bond becomes due in 2034. Even before the official presentation on Friday, two bondholders expressed interest. They are Vontobel, an investment firm that holds about ten percent, and Candriam, which holds two point two percent of the bonds. Belize needs to have seventy-five percent of the bondholders agree to the offer.

Channel 5


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