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Mar 8, 2017

Further Savings Result from Elimination of Early Amortization Payments

Dean Barrow

Government did not meet the February payment in light of the ongoing restructuring.  And according to the Prime Minister, the big saving is in the amortization, which was set to increase in August of this year.  However, government says it has been able to curtail as much as eighteen million dollars annually from the coupon rates.

 

Prime Minister Dean Barrow

“So that in itself represents a huge savings.  But the even bigger savings from my point of view, you realize that when you look at what was to happen to amortization and the fact that we’ve completely done away with amortization because the position was that the semiannual coupon payments, interest payments of thirteen million, eight-fifty-five, three-eighteen-forty-two, was going to go up right here in August to seventeen million, eight-one-four, one ninety-eight-fifty-five.  So on the coupon, on the interest rate we’ve saved a difference of between, well now it’s a little under thirteen point eight-five-five and seventeen million, eight-fourteen… Eighteen million Belize dollars a year.  But where we were really going to have our clock cleaned was when the amortizations would have started which you would then have had to the interest payments.  As of the year 2019, we would have had to start paying amortizations, August, twentieth, 2019 of thirty-one million dollars.  So that by August of 2020 we would have been paying the seventeen million in interest, plus the amortization of thirty-one million.  We looked at what that was going to do.  You would have been paying like sixty-four for round figures, sixty-four million U.S dollars a year, from 2020 straight through until the end of the bond, which was to have concluded at that time in 2038.  So every year from 2020 you would have been paying this.  There is simply no way, apart from finding the Belize dollar amount which would have put a strain on our economy, there is simply no way our foreign exchange earnings could have sustained this sixty-four million dollar withdrawal from the system annually, from 2020 to 2038.”

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