P.M. Touts Savings of New Superbond to Honor G.O.B. Commitments
Since Friday, there was indication that the creditor committee representing bondholders had accepted the latest offer by Government for the restructuring of the Super Bond. Prime Minister Dean Barrow this morning provided specific details of the proposal where payment towards the national debt should see an interest rate that sits below five percent per annum. According to the PM this represents a decrease of about twenty-seven percent from the previous borrowing charge which translates into the equivalent of approximately one hundred and seventy million dollars in savings over the life of the new agreement which should expire in 2034. The proposed restructuring requires the approval of seventy-five percent, a majority of the bondholders, and is being presented as a consent solicitation. Prime Minister Barrow emphasized that government is prepared to meet the conditions of the new arrangement without having to retrench public officers or freeze wage increases for teachers.
Prime Minister Dean Barrow
“Under the terms, before we renegotiated, we paid interest annually at five percent. That amounted to some twenty-six million U.S. dollars per year. We pay the interest payments semiannually, twice a year, and that five percent was the rate at which we would have paid had we made the payment in February. The semiannual payments are in February and in August but that was the last payment at the five percent interest rate. Thereafter, under the terms that we’ve now renegotiated, the rate would have gone up to six point seven-six percent in August. So when we succeed in getting the rate under five percent, it is not a comedown from five percent, it is a comedown from six point seven-six percent which we would have been obliged to pay in August. Now the rate is four point nine-three-seven-five. Two things, remember this is basically a comedown from the six point seven-six percent that was waiting for us in August and even a comedown from the five percent. You might say, well it is only a sliver under five. Well every mickle makes a muckle and I will tell you that we had to go at it hammer and thongs with the bondholders because they were saying but Christ man, we are already agreeing that you will not have to step up in August, leave it at the five percent. And I said it is both psychological and real. I need to bring home the bacon, the team needs to bring down the bacon to the people of Belize and I insist it must come in under five percent and by gully that’s what we were able to do.”