Mar 2017 Financial News

Bondholders endorse Belize position on Super Bonds

Mar 09, 2017

BELMOPAN– A committee representing the majority of bondholders has endorsed a revised proposal from Belize that reduces the interest rate on the socalled “Super Bond 3.0” and shortens its maturity.

In January, the Bank of New York (BNY) Mellon, the trustee of Belize’s Super Bond gave the green to the new committee that included representatives of several funds, including Greylock Capital Management and Grantham Mayo van Otterloo to negotiate with Belize.

Charles Blitzer, the advisor to the committee, speaking on Belize News 5 Television news broadcast on Tuesday night, said that the group supports the new position “because the government is making commitments to adjust its fiscal stance, to reduce fiscal risk going forward, to improve debt sustainability. And compared with the original proposal in January, the terms are somewhat better,” he told television viewers.

Belize’s 2038 Bonds were issued in 2013 and are the only government debt securities outstanding in the international capital markets.

The Dean Barrow government recently announced a revision of its position regarding the restructuring of the socalled “Super Bond 3.0” that was originally due by 2038.

“Specifically, the Proposed Amendments would change the amortization structure of the Securities, which currently amortize in 38 equal, semi-annual instalments commencing on August 20, 2019 and ending on February 20, 2038, with the effect that the outstanding principal of the Securities will amortize in five equal, annual instalments commencing on February 20, 2030 and ending on February 20, 2034, The government said in a statement.

In addition, it said the interest rate on the Securities, currently at five per cent per annum and scheduled to step up on August 20, 2017 to 6.767 per cent per annum, would be fixed through final maturity at 4.9375 per cent per annum.

Belize said it would also give certain undertakings regarding its fiscal adjustment programme.

The government said that the expiration date of the Consent Solicitation has been extended to March 10, 2017.

Blitzer said that the Bondholders’ Committee’s responsibility is to negotiate in good faith with the government and that “the government’s responsibility is to negotiate in good faith with the committee, and that’s exactly what occurred. And I think the final agreement represents a positive step forward.”

(CMC)

Source:
Trinidad Guardian, A17
Thursday March 9, 2017