Superbond is Done Deal, But is it a Good Deal?
It’s now official: Superbond 3.0 is a go. Though the Consent Solicitation Offer has been extended to Wednesday of this week, Prime Minister Dean Barrow confirmed that a three-quarter majority of bondholders agreed as of Friday to the new terms – just under five percent interest semi-annually and five soft bullet payments due between 2030 and 2034. The Prime Minister touts it as a victory for the country and his Government, but inside the House on the occasion of the presentation of the motion to amend the original terms, Leader of the Opposition John Briceño was more sceptical, leaving an opening for the Prime Minister to counter-attack.
Prime Minister Dean Barrow
“Zurich, on Friday evening before five – we had put out the press release because Zurich’s amount had been with their custodian but had not, because of paperwork, gone through to the trustees. I am sure that I heard that later on that Friday evening, sometime after five in New York – or if not, it certainly would have gone by this morning, because it was already in hand; it was just the transmission process. So that is, as far as I can tell, a done deal.”
John Briceño, Leader of the Opposition
“We’re not really winning, per se, Madam Speaker; we say that we are going to pay afterwards, but in 2030, we have to start to pay a hundred and five million U.S. dollars per year for the next four years. That means that we have to start to put aside monies from now; we can’t wait until 2030 and then write a cheque for a hundred and five million dollars U.S. So in effect we will still have to saving some money, but yet paying interest on the entire bill. Every business person will tell you that yes, you borrow long, but you try to pay short; but in this case, all we are doing is just deferring payments to the principal, and then you are just paying interest upon interest upon interest. So in effect, Madam Speaker, I don’t think really this is a good deal, as to what the Prime Minister was talking about. And to go through this whole trauma and for Belize to start to get this reputation of malpago – that we “hard-pay” – for us to save seven million dollars, Madam Speaker, it’s really not really worth it.”
Prime Minister Dean Barrow
“When we re-negotiated our what? Superbond two, and now our Suerpbond three – I don’t know if it’s just convoluted syntax, or it is deliberate, to call the re-structuring of the P.U.P. Superbond by the U.D.P., to refer to the re-structuring process as the “U.D.P. Superbond.” (Shouts) I want to take up from what you said; you know, this is the disfiguring face of the P.U.P. – this is the face of the P.U.P. with all the warts and carbuncles and boils and festering sores, with the pus oozing out – how can you attempt to do something like that? This Superbond is the People’s United Party’s Superbond! (Applause) All we have done is to re-structure it twice, producing massive savings for the people of this country; and absent those re-structurings, we were going to hit a wall, and that would have been the end of the country.”
The Prime Minister went on to list nearly all of the original loans bundled in the Superbond, many with high interest rates, and the list of “failed” projects funded by them.