G.O.B. Heavily Revises Terms of Superbond Negotiation in Major Concession to Bondholders
We begin with breaking news. Just before news time, the Central Bank of Belize released a statement confirming major and extensive revisions to the Government of Belize’s proposal to restructure the Superbond and extending the expiration date for the Consent Solicitation Offer originally issued on January twelfth. This was followed by a release by the government. The offer now expires on March tenth, while the amendments were revised as of March second. According to the statement, the interest rate on the 2038 Bonds is now set at four point nine three seven five percent commencing February twentieth, up from four percent. The revised principal amortization schedule now calls for five equal annual instalments commencing on February twentieth, 2030 and ending on February twentieth, 2034 (rather than three equal annual instalments commencing on February twentieth, 2036 and ending on February twentieth, 2038, as proposed in the January twelfth, 2017 Statement). The final Maturity Date of the Bonds is being advanced from February twentieth, 2038 to February twentieth, 2034. Belize is undertaking to achieve a primary surplus equal to at least two percent of GDP in each of the fiscal years 2018/19, 2019/20 and 2020/21. If Belize fails to meet that primary surplus target in any of those years several things happen. First, interest payments on the Bonds for the subsequent twelve months will be payable quarterly rather than semi-annually; and second, Belize will seek the assistance of the International Monetary Fund in analysing the reasons for the failure to meet the primary surplus target and will ask the IMF to make recommendations regarding appropriate remedial measures. The IMF’s assessment and recommendations will be made publicly available. Finally, Belize is agreeing that it will apply twenty-five percent of the gross proceeds (in excess of fifty million U.S. dollars) of certain new foreign currency borrowings contracted after March second, 2017 to reduce, by purchases in the secondary market or otherwise, the outstanding principal amount of the 2038 Bonds. The bondholders now have one week from today to formally respond.