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Feb 13, 2012

PM responds to Standard & Poors’ downgrade

We start the news tonight with news on the financial front following a downgrade of Belize’s credit rating by Standard and Poor’s. The downgrade came after Prime Minister Dean Barrow said in his election date announcement that he was going back to the electorate to “ask for your clear instructions to drive the naysayers back; to do something about the super bond.” That statement pushed the country into junk bond status from a B minus to a CCC plus rating last week. S&P said that “The nature of the statement and prominent public office of the speaker signals, from a credit perspective, lower predictability that the government will continue to service its external commercial debt. [It] raises questions about the political commitment to timely debt service.”  S&P added that “low economic growth, a weak investment outlook, increased levels of crime, and limited ability to raise government revenue, all of which, from a credit perspective, weaken the government’s payment capacity.” The PM made a statement today to cool down the credit rating agency. He said that two super bond payments are scheduled for February and August and will be met. News Five also asked the PM how the downgrade will affect the country.

Dean Barrow

Dean Barrow

“The downgrade does not in any ways affect us domestically. I made the point already that these rating agencies and the rankings they assign are important for those operating on the capital markets; who are borrowing commercially. Depending on your ranking, your borrowing cost either increase or decrease. We don’t borrow on the commercial markets so the ratings are of no practical consequence to us but in respect to the super bond, when there is a downgrade to some extent it signals to the bondholders that they might start thinking of coming to terms with the government since for their purposes the intent of downgrade is to show unless there is a restructuring of the super bond, Belize might want to contemplate the option of saying either that it can’t pay or it won’t pay. I need to make clear that while the step up to the eight point five percent interest rate occurs this year in August, we have the monies to pay the February installment and we have the monies to pay the August installment—there is no difficulty there. I so want to say that as the analyses indicate, we will be talking to international community, talking to the bondholders to say that sooner or later, there has to be a restructuring. If you think far ahead and you think about 2019 when you begin to look at a principal repayment, it ain’t going to happen; it can’t happen. I might take the view, well that’s not my concern—I won’t be around in 2019—but I believe that I have tried to make a case for Belizean nationalism. I have tried to make a case of looking out for Belizean interest and in that vein; I want t be certain that in a second term we do something about restructuring of the super bond.”

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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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13 Responses for “PM responds to Standard & Poors’ downgrade”

  1. Gone fishing says:

    “low economic growth, a weak investment outlook, increased levels of crime, and limited ability to raise government revenue, all of which, from a credit perspective, weaken the government’s payment capacity.”

    At least they did not say crooked government officials screwing the jewel, working for Guatemala or themselves. Free drinks for everyone until elections.

  2. Rod says:

    Bald head no get it well if you people want more of the same corruption another 500 murders and your way of life snuffed out vote Fu bald head barrow vote udp.

  3. blackberry says:

    I believe this is the main reason why the PM has called an early election. Belize will not be able to pay it`s bills and this is the alternative to retrenching as he did in the last UDP term. There is no sugar daddy to bail Belize out of it`s debt as the PM bail out the housing loans. Gear up unions of Belize, i can see Belize becoming another Greece and us roiting in the streets to keep the little we have. whoever wins GOB and the international banks will be squeezing every cent from us for debt servicing. Belize we may be facing devaluation sooner than we realize.

  4. Me says:

    pm barrow has lost sense of things. There most be something that made him loose his brains and the common sense. This pm barrow those not realize all Belize products or the majority of products sold in belize is imported. So if pm does not want to pay or paying is not a first issue for him, then to the companies that import this products they might not get the credit for the scare that even there can be a devaluation ofthe belize dollor. The only thing that whould make this barrow head (pm) loose sense is monies, he is getting millions out of belize into his pocket.
    In relation to gangs , barow head will now get sued from gang members , the saddest thing is that the monies gang members will use to pay thier attorneys comes from the same monies barrow head is giving them. what an embarrasment, but yet again this only happends in belize.
    barrow head you should be charges for illicit enrichment, and serve time in jail will all those udp corroupted ministers (only the corrupted, there might be one that is ok). Also the next government should really quitar quitat all the monies you have stolen, and filter it to the people of belize and recesion will be over.(yes that is the amount of monies you are sucking from belize peolpe)

  5. Charlie Price says:

    This is the sign of FAILURE…are we better off than we were 4 years ago?

  6. Tanya says:

    Let’s all go independent this time…if there is one in your area.

  7. jesse says:

    Starting with the price of GASOLINE,all belizeans should buy their gasoline in guatemal or chetumal,the misery belizeans live is because both lawfirms dont give a $#!% about them.

  8. Mr. Concerned says:

    the election must have a life saver but he will regret for sure!!

  9. Louisville, Ky. says:

    @ Me, what exactly are you trying to say? Are you still in school, if not maybe you should go back and take some night classes or something. Take english and spelling for starters. Don’t you think you are a bit out of your league on this blog?

  10. ceo2 says:

    I think it is a time of reflection for the Belizean people, let us start to get those that have gotten us in this mess and never vote for them again, especially “follow the money puppet”

  11. now i see says:

    I think that the U.D.P. Should get one more term.You cant do magic and fix all the mess the p.u.p left behind in only 4 years!Thats why we cant get ahead,who evers turn it is try to grab as much as they can because they know that there time is limit.

  12. Think-about-it says:

    @now is see: If the pup had left behind such a mess, why wasn’t Belize downgraded in 2007 or 2008? Nice try mr. pm, but this one falls squarely in the udp’s lap. The superbond gave Belize breathing room to grow its economy and reduce the debt as a percentage of GDP, which is really what matters, but instead it was just fight fight fight and quitar quitar quitar. Fight Ashcroft, fight Fortis, fight Chamber, fight the Bar Association, fight the mayas, fight the caneros….and all the while paying udp lawyers millions to do the fighting. Now after 4 years the pm wants “instructions” from the voters? Didn’t he get that in 2008? WTF?!

  13. Liberty and Freedom says:

    “Belize can’t pay or it won’t pay” – what a truly intelligent message to send to the international monetary community. Where do taxes come from Mr. Prime Minister? They come. from commerce.
    Does Belize have enough internal commerce to cover it’s debts? We certainly have a number of natural resources (including oil) and a labor force that can be trained. The big missing piece of the puzzle is the lack of a GOB driving force to attract foreign investment. If I were an international lending institution, e.g. World Bank, why would I lend Belize one dime if our country is going to default on it’s obligations. I loved the other side of Mr. Barrow’s answer – “we can always restructure”. Sure, pay more interest in the long term and have other countries dictate policy to Belize, e.g. UNIBAM threat. Money is a great weapon when a country is broke.

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