Posted: Wednesday, February 22, 2017. 11:01 am CST.
By BBN Staff: Belize did not make a scheduled US $13.3 million payment toward the 2038 “Superbond” on Monday, in the midst of stalled negotiations to restructure the bond for an “unprecedented” third time.
Prime Minister dean Barrow, along with his team of financial advisor and negotiators, returned on Sunday following meetings with bondholders in New York. Barrow informed the nation that Belize would not be making the February 20 coupon payment due on the 2038 bonds.
He explained, however, that under the conditions of the bond, GOB is allowed a 30-day grace period to make the payment. It is expected that during the grace period, GOB will continue to pursue a deal with bondholders. It current consent solicitation, in which GOB has proposed that bondholders drop the rate of interest from 5 to 4 percent and that amortization payments be rescheduled into three equal payments beginning in 2036.
Sources indicate that GOB may consider asking for a reduction on the principal payments and offer bondholders an interest rate of 6 percent. PM Barrow did not comment on the specifics of the negotiations other than to say that GOB remains cautiously optimistic.
GOB may also consider making a partial payment before the end of the 30-day grace period, however, bondholders reserve the right to decline partial payment. There is a 90-day window before a sovereign default can be declared. GOB is most likely hoping to settle on a deal before a messy default.
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