Superbond 3.0 is now a done deal

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Posted: Friday, March 17, 2017. 2:57 p.m. CST.

By BBN Staff: Yesterday, the Government of Belize via a press release announced that holders of more than 87 percent of Belize’s U.S. Dollar Bonds have consented to certain amendments to the terms of those Bonds.

According to the release, following extensive consultations with representative bondholders, Belize has now revised its consent solicitation.

“The Bonds contain a collective action clause that permits modifications with the written consent of holders of more than 75 percent of the outstanding principal of the Bonds. Once that voting threshold has been reached as it now has for Belize’s Consent Solicitation, the proposed amendments become binding on all holders,” the release states.

The Bonds will have a final maturity date of February 20, 2034 and the instrument will be redenominated “Belize U.S. Dollar Bonds Due 2034”.

The Government now expects that all conditions precedent to the effectiveness of the amendments will be met no later than March 21, 2017.

“The principal amount of the Bonds will now amortize in five equal, annual installments commencing on February 20, 2030 and ending on February 20, 2034, replacing the prior amortization schedule which called for 38 semi- annual amortizations beginning in February 2019. The interest rate on the Bonds (which was scheduled to step up to 6.767 percent on August 20, 2017) will now be fixed for the life of the Bonds at 4.9375

percent per annum,” the release further adds.

The Bonds had been restructured twice before, once in 2007 and again in 2013 and represents more than one third of Belize’s total debt stock.

On Monday, PM Barrow presented the country’s budget for fiscal year 2017/18 that will incorporate fiscal adjustment measures equal to 3 percent of GDP.

“Achieving significant debt relief on the 2038 Bonds is crucial to the success of Belize’s economic recovery program”, said the Prime Minister.

“The citizens of Belize will be doing their part through a rigorous fiscal adjustment program. We appreciate that these sacrifices will be matched by significant concessions from Belize’s external commercial creditors”.

The renegotiation of Superbond 3.0 came to a price of almost BZ$20 million in legal fees.

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