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Oct 2, 2015

Belize City Mayor Refutes Rumors of Another Municipal Bond

Darrell Bradley

News Five also asked Bradley about persistent reports that on the eve of general elections, there is talk in City Hall about floating another municipal bond. He refutes that report, but says that the Council is actually in a position to refloat a portion of the bond at this point – partly because of their sterling record of repayment and partly because of the liquidity in the system.

 

Darrell Bradley, Belize City Mayor

“It’s a revolving fund so that what the City Council does—and this is common for all municipalities that do bonds—particularly the municipalities that we looked at in terms of samples and modules in South Florida, in parts of the United States and in Canada and in other places that they do this. As long as the municipality meets the debt service requirement, it serves as a revolving amount of money that allows the municipality to do capital projects. So that for example, the reason why the bond program was scheduled two years, five years and ten years in terms of the maturity date was that at those intervals, when the repayment is made, the bondholders could roll over the bond and the municipalities at those intervals could do capital projects. So that what you are doing is that you are finding a way to creatively fund capital projects in circumstances where the municipality may not have the bulk of the fund. We were able to retire a substantial portion of the bond; one point five million dollars—I think that matured on December twenty-fourth of last year. We never rolled over at that point even though we could have done so. One of the things, and in relation to the roll over period, once those bonds matured, the City Council didn’t go to the investors; the investors actually came to the City Council because I don’t know if you are aware, liquidity is very high in our markets and banks are offering zero interests. So that investors are looking for an opportunity to invest funds. So that it is built into the structure, but we would have refloated segments of the municipal bond at the intervals when they became due, but we never did that.”

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