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Consent From Bondholders

Posted By: Marty

Consent From Bondholders - 06/09/21 10:29 AM

Belize has gotten consent from its bondholders who've agreed to a soft default on the Superbond coupon payment which happened last month.

A release from the bondholders committee says "The Committee has now reached agreement" with Belize's advisors on "alternative proposals under a non-disclosure agreement."

The release says, "Accordingly, the Committee members intend to agree to Belize's pending consent solicitation that would defer the grace period with respect to the coupon payment that was due on May 20, 2021."

It continues, quote,
"The Committee encourages all bondholders to carefully consider the terms of the consent solicitation in making their own independent appraisal of the merits and risks of participating in the consent solicitation." End quote.

Belize has asked that the payment be pushed back to September.

Channel 7

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Bondholders Agree to Grace Period Extension

On Monday, Prime Minister John Briceño said in an interview on Channel Five’s Open Your Eyes that Belize’s international bondholders had been playing what he called “hard ball,” but were “shooting themselves in the head.” Well, it seems the bondholders’ approach has changed. This afternoon, Reuters news agency reported that the group of Belize’s creditors has altered course, saying that they now support G.O.B. request for an extension of the grace period to October for a coupon payment Belize missed last month. That payment was due on May twentieth. While there is nothing yet on the Central Bank of Belize’s website, Reuters is reporting that a creditor committee which includes bondholders, who had rejected G.O.B.’s proposal just last week, has “reached an agreement with the government’s advisers and intends to agree to the deferral.” A story in the Financial Post says there is a new non-disclosure agreement in place and that the Bondholder Committee hopes this “will facilitate good faith negotiations based on supportable data and inter-creditor equity, and that the process will ultimately lead to a durable solution to the economic problems that underlie Belize’s debt-servicing challenges.” Reuters says the five hundred and fifty million-dollar bond, which traded as low as thirty-two point five cents on the dollar in the second half of April, last traded at thirty-eight point five cents according to Refinitiv data.

Channel 5
Posted By: Marty

Re: Consent From Bondholders - 06/11/21 10:40 AM

The Financial Secretary Comments on Bond Payment extension

It has been reported in the international press and today the Financial Secretary Joseph Waight said that yes, some of Belize’s creditors have agreed to extend the grace period on the seven million dollars coupon payment, which was due earlier this year to late September.  He says the time will be used to continue ongoing negations with bondholders for debt restructuring.

Joseph Waight, Financial Secretary

“Under the terms and conditions of the bond, a payment was due on the twentieth of May. And, there was a thirty days grace period beyond that to take you to the twentieth of June to secure the payment, after which it then goes into what you call a hard default. A hard default means that now you defaulted, and then it is, it can be exercised by bond holders to try to collect their money. What the government has done, have reached out to some of the bond holder to ask for an extension of this grace period by a further ninety days, which would take it to the twentieth of September to allow for sufficient time for what we hope would be a positive outcome of the negotiations we are having with the bond holders to see if we can get some debt relief. So really the extension is for the grace period, and what we have heard from some of the creditors is that they would support it. But you would need most bond holders to support the extension of the grace period.”

Paul Lopez

“So, you are saying, it is not a case where, when that period is up sometime in September, that seventy million will have to be paid at that point?”

Joseph Waight,

“Well, the grace period gives you an extension. If nothing happens then it becomes due. But what we are hoping is that this will give both sides enough time to sit down and come to some understanding and some change.”

FinSec on International Financing

But, undoubtedly these repeated defaults on loan payments to bond holders have had a negative impact on Belize’s international reputation.  Waight says Belize continues to bilateral financing, but he acknowledges the economy is in dire straits.

Joseph Waight, Financial Secretary

“Well you know, we have a structural problem. We have an unsustainable debt situation, and we are trying to cure it. Once it is cured, we will have renewed access to capital markets. But at this point in time, it is what it is. This is where we are. We do have access to what we call the official sector. We continue to have access to the IFIs, the multilateral agencies, the Caribbean Bank, the IDB, and others. We have a strong bilateral program with the US and Venezuela. So, we do have access to financing. It’s just commercial financing is the difficulty right now. And commercial financing is quite expensive.”

Channel 5

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