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Jun 14, 2012

Bondholders don’t want to lose in restructured Superbond

Dean Barrow

Should the government prepare for a head on collision with holders of the Superbond? On Wednesday, Prime Minister Dean Barrow updated the nation on the national budget to be presented on June twenty-ninth in the House and on the progress of negotiations to restructure the Superbond.  He told the media in his first press conference since his re-election that the Superbond team will impress upon bond holders that Belize can’t meet payments.

 

Dean Barrow

“I would expect that we will have a press conference with the debt restructuring negotiating team as soon as we are able to give the sort of details that I know you will want to inquire into. But for now, where we are, is that the draft narrative, the draft case, for debt relief has been prepared by the team. In other words, what we have to do is to make coherent and compelling argument to say to the bondholders that we absolutely can’t pay; we will not pay because we can’t pay. And that case is made by advancing the numbers, the facts, the data; analyzing those data and facts and numbers. I have had a look at it, I have indicated to the team leader that I am happy with it and that is what is going to be set to the bondholders; and shortly thereafter, we will begin the actual face to face negotiating process with as many of the bondholders as we can physically interact with. There are some small bondholders that we will perhaps will not be able to deal with face-to-face; the engagement and the discussion will be by way of emails and other types of correspondence. But with significant number of creditors, we expect the face-to-face engagement process to begin shortly. I am certain that within a week or two we will be able to give you an actual date.”

 

But the holders of the Superbond are not sitting back waiting to be told anything. They are doing their own preparations and it is likely they will have a message for the negotiating team. This is according to an article in today’s issue of the prestigious Financial Times. The article entitled; “Concerns over Belize Debt” puts a huge question mark over whether there will be a positive end to the restructuring of the five hundred million dollar Superbond. Essentially, it says that bondholders have formed a creditors committee out of concern that Belize will become the next country to default on its debts.  The ad hoc committee, representing holders of more than two hundred million dollars of the bond due in 2029, was  formed after the government indicated it could “amend certain terms” of the bond. The report quotes AJ Mediratta, a partner at Greylock Capital Management who is also the Chair of the creditors committee as follows: “While we are sympathetic to the challenges facing Belize, any proposed amendment that results in a net present value or principal loss to creditors would not, based on the committee’s current understanding of the situation in Belize, be considered acceptable or, for that matter, necessary.”  The Financial Times also reports that the bond has been trading at a subdued rate in anticipation of a debt restructuring. A full text of the article can be seen at channel5belize.com. 

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8 Responses for “Bondholders don’t want to lose in restructured Superbond”

  1. Storm says:

    Defaulting on any part of the principal due would be horrible for future generations of Belizeans, because it will totally destroy their ability to borrow even in dire necessity.

    But I think reasonable negotiators could propose lowering the interest rate, which is all we are paying now and for the next several years. World interest rates are much lower than we are paying. If the interest rate can be negotiated down, say to half, then maybe we can begin to make gradual payments. That approach will reduce the principal a little — AND IT WILL SHOW OUR GOOD FAITH.

    With world interest rates at historic low levels, we should be able to achieve this first step to financial recovery.

    Then, if we elect a GOB with PROFESSIONALLY PLANNED economic policies, we might be able to grow out of our poverty and pay off this stupid debt — as a nation, we borrowed much, and received little of value to the nation for our indebtedness. I am not disputing that a few select Belizeans and their friends got rich from the borrowing, but why did the entire country have to go into debt for them?

    For now, let’s try as a nation to live within our means and try to pay our debts like honourable people.

  2. I Belize it says:

    What is the worry? Only Belizeans posses Belizean Dollars.
    What bond holder would continue own them?

    Puma will soon grind them to pulp, and have Venezuela turn it to real gold at market prices.

    All hail GOB!

  3. Rod says:

    Man people are dying all over the place and all you do is talk about is nonsensical topics we want to know what is going to be done about all the children being killed and raped all the home invasions all the corruption which is so rampant in your go. That it makes the Mexicans look tame in comparison that’s what we want to here are you listening o I forgot you have been in Miami for months just resign barrow do the country a favor and resign you are such a failure at your job.

  4. Mike says:

    When will Dean Barrow understand that Belize needs INVESTORS? Creditors are investors. Fighting creditors will only hurt Belize. We need to make investors feel welcome in Belize.

    Super Bond Investors: Belize has an open door policy towards investors. Don’t listen to the current Prime Minister, because he will be out of office shortly. He will not finish his term. One year from now maximum. A new Prime Minister will be elected, who will be far more sensible than the current train wreck.

    Most Belizeans are fed up with this government that doesn’t want to pay investors, but insists on paying off Gang Members.

    The worst Government in the history of Belize.

    UDP LEADERS: YOU NEED TO ELECT A NEW PRIME MINISTER. The People of Belize warned you on March 7th.

    We are NOT satisfied with the current Prime Minister. If you do not elect a new Prime Minister, you will suffer GREATLY AT THE POLLS NEXT ELECTION.

    The PUP WILL WIN IF YOU DO NOT CHANGE PRIME MINISTER AS SOON AS POSSIBLE.

    YOU HAVE BEEN WARNED.

  5. wakeup says:

    I think it’s time for rod to do us a favor and die. Rod is a fool and an embarassment to the people he represents. And he need psychological help for his obsession with Dean Oliver.

  6. Elgin Martinez says:

    Dean Barrow can you please educate the Belizean people on what the Superbond is.

  7. A Jew says:

    A default on the loan is imminent if things continue as is, that’s all i have to say. I have no more energy to keep typing because these things just make me so sick.

  8. jahkid says:

    rod or rot or rat is worst that all the criminals around our counrty. his mouth stinks the entire nation every second, real stinking breath.

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