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Belize seeks extension for bond payment

HeadlineBelize seeks extension for bond payment

BELIZE CITY. Thurs. May 20, 2021– The government of Belize issued a press release on May 19, 2021, in which it informed the public that it had sent an official request, known as a “Consent Solicitation,” to the holders of Belize’s Super-bond, for an extension of the grace period for the May 20, 2021 coupon payment, which was due today.

The government is asking for an extension until September 19, 2021 — the end of the grace period for the next scheduled coupon payment, which is due on August 2021. Thus, states the GoB press release, if the request is granted, “the amended grace period will expire on the same date as the grace period applicable to the next scheduled coupon, payable on August 20, 2021.”

During a recent interview with the Minister of State in the Ministry of Finance, Chris Coye, he had clearly stated that the country was not in a position to make the $7 million payment — particularly since provisions had not been made in the budget for the payment of this amount. He anticipated a “soft default,” since the negotiations were expected to go well beyond the date set for the coupon payment.

The government delivered a consent solicitation to the bondholders outlining the repayment commitment the country will take.

The release stated, “Belize will pay to each Eligible Holder that delivers a consent in accordance with the procedures described in the Consent Solicitation Statement a consent fee in an amount equal to the U.S $0.50 for each U.S $1,000 principal amount of Securities held by such Eligible Holder; provided that Belize receives the Requisite Consents and the Proposed Amendment becomes effective. Holders of Bonds for which no consent is delivered will not receive such consent fee.”

What is noteworthy in the press release is the particular reason that GoB outlined for the extension of the grace period. The release stated, “… the Government has implemented aggressive fiscal adjustments measures and commenced consultations and discussions with advisors, bondholders and other parties regarding possible alternative terms for meeting its contractual obligations under the Bonds. The Government is seeking consent from Eligible Holders (as defined in the Consent Solicitation Statement) to the Proposed Amendment in order to give the Government the necessary time to discuss these alternatives with representatives of the Holders and execute an appropriate transaction.”

The Consent Solicitation expires on June 1, 2021 at 5:00 New York Time unless extended or terminated by Belize, the release stated.

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