BELIZE CITY, Wed. Oct. 27, 2021 — Yesterday, Prime Minister John Briceño officially introduced in the House of Representatives the Blue Bond Loan Bill to initiate the historic purchase, redemption and cancellation of the so-called Superbond, at a 45% discount for the country — yielding savings of almost $1 billion BZD. (over $700 million BZ).

In early September of this year, the Government initially embarked on a process of soliciting the consent of bondholders to a buyback that would be financed through an innovative deal with the Nature Conservancy, and as of today, the Government has revealed that 87.4% of bondholders have tendered offers — far more than the 75% supermajority needed to push through the deal.

“This motion, along with a contemporary Blue Bond Loan Bill 2021 also tabled today is a first emphatic step in my administration’s march to public debt sustainability,” Prime Minister Briceño remarked in the House.

This agreement, now in its final stages, will allow for a loan of up to $365,000,000 to be granted to the Government of Belize from the Belize Blue Investment Company LLC, the organization created by the Nature Conservancy to facilitate the loan disbursement to the Government.

PM Briceño explained, “The money to pay off the Superbond will come from the Blue Bonds, a financing mechanism created by The Nature Conservancy and their banker Credit Suisse. Belize will access three hundred and sixty-three US million dollars of these bonds for the following purposes: three hundred and one million for the discounted repayment of the Superbond; twenty-four million to pre-fund a marine conservation endowment account; 18 million set aside as an original issue discount in order to facilitate a lower interest rate in the yearly repayment years; ten million as a debt service reserve account and 10 million to help cover the closing cost for the transaction.”

According to the Prime Minister, the country will be paying an interest rate of approximately 6% on the Blue Bond loan. This loan is to be repaid in 9 years, starting April 20, 2032, with 18 equal payments semi-annually and a final payment in April 2040.

As a result of this Blue Bond deal, the government will reduce its total outlay on debt servicing by 315 million US dollars.

As a part of this loan agreement, the Government of Belize must, as mentioned, enter into a Conservation Fund Agreement through which it will commit to pre-funding an account to the tune of US$24 million dollars for marine conservation purposes. GOB must also reach conservation milestones and meet commitments set out in the agreement or be subject to penalties.

“If on any quarterly payment date, the Government of Belize shall have failed to achieve one or more Conservation Milestone within the applicable grace period (each, a “Conservation Event”), makes a payment equal to the U.S.$250,000 plus a sum equal to U.S.$50,000 times the number of Conservation Events that have occurred and are continuing as of such quarterly payment date,” the loan resolution states.

An ancillary agreement was also entered into as a part of the loan agreement, but details were not given.

The Leader of the Opposition, Hon. Patrick Faber, and the other Opposition members of the House supported the motion but pointed out when they addressed the House that they had not seen certain documents regarding the Blue Loan agreement and the resolutions tabled in the House. Hon. Faber complained that they were not given the full set of documents until the morning on which the House meeting was scheduled to take place and that those documents were still incomplete.

A release from TNC issued last week states, “TNC would like to thank the Government for its efforts to negotiate the Conservation Commitments that recognize the crucial role that Belize’s ocean plays for the Belizean people, their livelihoods and the economy at large. We look forward to outcome of the bipartisan review in National Assembly and Senate in the coming days.”

A Senate meeting is scheduled to be held on Thursday, October 28, according to the Government of Belize Press Office.