Posted: Saturday, January 18, 2025. 11:31 am CST.
By Aaron Humes: It has been a decade since the Belize City Council began floating municipal bonds for the purpose of infrastructure, but with institutional investors – it’s giving the banks a run for their money.
This week, the Belize City Council hosted an Investment Forum to boast about municipal bonds’ virtues and value.
Mayor Bernard Wagner said he wanted to “sell” the idea to the likes of pension funds, insurance companies, corporations, banks and retail investors who want a greater return on his or her investment and help the City to develop its infrastructure.
“What we have as municipal bond balances is in the neighborhood of $30 million; we are seeking to reprofile those short-term papers – those are one-year papers – into long-term bonds, which means they are either five years, 10 years, 15 years or 20 years…and at the same time, get new funds of $15 million. So we are looking at an endgame of having municipal securities valued at $42 to $45 million,” Wagner told us.
While Belize City in total cannot come close to matching a total of $132 billion like New York City, every dollar invested is managed and overseen by Central Government, through legislation such as the Municipal Securities Act, and managed by the Financial Services Commission (FSC).
For the purposes of capital expenditure, Mayor Wagner echoed predecessor Darrell Bradley in stating that taxes and revenue collection alone cannot build the Old Capital, but there is money in the banks that can: “…if you are engaging in capital projects, huge projects, street infrastructure parks, and playgrounds expansion of your e-mobility project you need significant capital and you will never be able to get those on a day-to-day basis of property taxes, trade license, liquor, license or traffic fees. So you have to be able to access the market in the Belize market. The last time we checked there was close to 700 million in the banking system that is sitting in the banking sector and those funds can be utilized to drive development within a city especially like Belize city which is a growing city. We have over 730-odd streets – people want to walk on decent streets, people want to drive on decent streets, but how can we as a municipality be able to drive that development? The only way we can do it is by seeking capital from investors.”
The Council’s rate on its bonds is an average of 4.5 percent, better than the interest rate offered by banks; as for its repayments, legislation limits liabilities to 20 percent of recurrent revenue on average for three years, which works out to less than $3 million annually. The Council maintains a sinking fund with the subvention payment from Central Government and head tax collected on cruise tourism arrivals from the Belize Tourism Board (BTB).
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