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Government to talk to ‘Superbond’ holders on deferring interest payments

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Posted: Wednesday, June 17, 2020. 1:21 pm CST.

By Aaron Humes: Belize’s Government will ask holders of the 2034 US Belize bonds, otherwise known as the “Superbond” to defer payments due through next February 20.

Known as “capitalization of interest payments,” if it is accepted it would save Belize some $52 million in payments (US$26 million or $13 million per payment).

In its rationale the Government cited loss of tourism earnings (approximately 60 percent of all foreign exchange earnings) due to COVID-19. An estimated 18 percent tumble in gross domestic product is projected for 2020.

After talks over the next two weeks, a formal consent solicitation will be launched in early July. The next payment was due in August.

The Superbond has been restructured several times since it was first agreed and its current structure calls for twice yearly interest payments up to the end of 2029, when the principal payments begin, continuing up to 2034.

Bondholders will likely question whether Belize has kept to its maintenance of 2 percent of primary surplus in the budget and talking to the International Monetary Fund (IMF) for assistance if needed.

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