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Mar 7, 2017

Belize Must Pay Outstanding Coupon, Have I.M.F. on Stand-By

Charles Blitzer

In its daily news release, the Government gives all credit to the Prime Minister for cutting a deal which it say puts the country in a much better position to be able to service the debt. A press conference by Prime Minister Dean Barrow to provide further details, but Government is already saying savings will be realized as a result of revising the scheduled payments. Meanwhile, Belize has missed an interest payment on the 2038 bonds that was due on February twentieth, as it continued to engage in discussions with creditors. We asked Blitzer what happens to that collection, as well as why the I.M.F. may get involved.

 

On the Phone: Charles Blitzer, Blitzer Consulting

“There’s a commitment to adjust this coming fiscal year by at least three percent, and then a commitment to have at least a two-percent surplus going forward after that; that’s the commitment.”

 

Reporter

“And there’s a fail-safe that if it doesn’t work out that way, that the bondholders essentially take priority: that you get your interest payments quarterly, instead of semi-annually, and that Belize seeks the assistance of the I.M.F. – I believe our Prime Minister has said from the very beginning that the I.M.F. is not an institution he would go to in these circumstances; how was that turnaround achieved?”

 

On the Phone: Charles Blitzer

“You would have to ask the Prime Minister; but if they are off-target, then they’re committed to asking for technical assistance, advice, from the I.M.F. about to how get things back on track.”

 

Reporter

“Now can you say if the payment that was held off in February – is that part of the negotiated agreement?”

 

On the Phone: Charles Blitzer

“Yes; that payment is going to be made to the trustee, I think that’s what it says.”

 

Reporter

“Can you say when?”

 

On the Phone: Charles Blitzer

“I think I would have to go back to the exact words of the announcement on Friday; but my understanding is that it would be paid when the deal is completed, consented to by the required three-quarters (majority of the bondholders.”

 

While the Creditor’s Committee recommendation, having been appointed by a majority of bondholders is as good as a stamp of approval, the bondholders themselves must individually offer consent for the offer to take effect. Blitzer is reasonably confident that this deal will succeed – so much so that he would not speculate on the outcome of a worst-case scenario. We will have full coverage of the Government’s press conference in Wednesday’s newscast.

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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