General — 01 February 2017 — by Adele Ramos
Bondholders didn’t bite — GOB extends offer deadline

BELIZE CITY, Fri. Jan. 27, 2017–Holders of Belize’s billion-dollar superbond, due to mature in 2038, did not take up an offer from the Government of Belize by the Thursday, January 26, 2017 deadline, to accept a lower interest rate and a delay in repayment of principal being sought by GOB amid ongoing economic turmoil.

In a release issued on Thursday via the website of the Central Bank of Belize, the Government of Belize said that it was extending by a week the period during which holders may respond, so the new deadline is February 3, 2017.

The Government of Belize has been hoping to strike a deal with bondholders by the time the next payment on the bonds is due, on February 20.

Prime Minister and Minister of Finance Dean Barrow said today that the offer is being extended “for what we feel is good and sufficient cause.”

Barrow told the press, “…we certainly have come away with the impression that there is a willingness on the part of the bondholders, the creditor committee and their advisors, to discuss matters,” but added, “I don’t want to put it any higher than that; I don’t want to misrepresent them….”

On January 12, 2017, the Government of Belize had sought “the consent of holders of the bonds to amend this amortization schedule with the effect that the 2038 bonds will amortize in three equal, annual installments on February 20th of 2036, 2037 and 2038.”

As the arrangement currently stands, the 2038 bonds amortize in 38 equal, semi-annual installments commencing on August 20, 2019 and ending on February 20, 2038. Furthermore, the interest charges are due to increase from 5% to 6.767% per annum when the August 20, 2017, payment is due; but the Government is asking bondholders to reduce the rate to 4% yearly instead.

The bondholders responded five days after the Government’s public offer, saying that Belize’s offer was premature, alluding to the need for further fiscal adjustments that would help to ensure that, if bondholders agree to this third restructuring, Belize would not move to restructure the superbond yet again for what would be the fourth time.

The January 17 statement issued by a committee representing bondholders said that its members had reviewed and decided to decline Belize’s consent solicitation.

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