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Aug 20, 2012

Superbond’s non-payment bomb drops on bondholders

Joseph Waight

We start tonight with financial news on the accumulated five hundred and forty four U.S. million dollar Superbond which has become the most pressing issue before the government. Following an announcement on August eight offering three repayment scenarios, the government missed the coupon payment due today for some twenty-three million U.S. dollars. A one month grace period to make that payment now kicks in and government is staring a default which will have serious implications for the economy. While the Financial Secretary, Joseph Waight, was unavailable for comment to News Five, he is quoted earlier today in an article in Bloomberg saying that the government is also unlikely to pay during the grace period. Echoing what has been the official line on the non-payment, Waight says, “We simply do not have the capacity to make the payment. We are hoping to engage with creditors as quickly as possible.” Bondholders believe that the government is heading for a strategic default and is attempting to force bondholders to accept a huge discount of forty-five percent on the original value of the bond and to extend the date of maturity further away from 2029.  The three scenarios offered on August eight have already been rejected by bondholders. So for now the situation is precarious and there is a high level of uncertainty in the month ahead.

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30 Responses for “Superbond’s non-payment bomb drops on bondholders”

  1. Ricky Malthus says:

    What we see demonstrated here are : histrionics, melodrama, ignorance, economic incompetence, and a complete misunderstanding, deliberate or otherwise, of sovereign debt undertaking. What is it that Barrow, Mark Espat, Slusher, Joe Waight, Esquivel, and the other inanities don’t understand about debt payment and restructuring; or the world of finance we live in? Understand the Golden Rule of finance if nothing else: who has the gold , make the rules.

  2. Rod says:

    This pm and gov. Is the most incompetent in the history of this great nation and they should be kicked out immediately they are destroying this country from the inside out we don’t have to worry about Guatemala barrow and his gov. Is killing Belize from the inside out the stench of barrow ism continues wake up belizeans.

  3. Bear says:

    I believe the decision to default will be catastrophic for all the people living in the Jewel.

    It’s time for UDPs to abandon Hon. Barrow and FORCE an election, or to depose him within the UDP itself and select a new leader.

  4. Storm says:

    This is beyond terrible for the nation, it puts us down in history as one of the few proven deadbeat nations. That reputation will stain the Jewel long after Barrow is dead and buried.

    Here are questions Barrow, Waight, and Espat must answer:

    1. If we have the money, why not pay it? You told the nation it was in the budget to pay.

    2. If the money is gone, where did it go? Who has it now? What was it spent on?

    Even if we lack all the money for the coupon payment, commonsense and experience says that you offer to pay as much as you can, and to pay the balance little by little. You cannot negotiate successfully with arrogance and intransigence. We are the debtor, we are in the weak position, and we should be sincere, hat in hand, and FULLY SHOW OUR BOOKS to the creditors to gain cooperation.

    I am pretty sure it is too late for that with the international community. Barrow’s decisions have ruined us in the eyes of the world. Someone needs to go to the Governor General and see if the Queen can send someone with full powers to figure out what money we have, where it is, and if money is missing, who has that.

    Do you agree or disagree?

  5. Uncle Benji says:

    We all knew that this was a tragedy waiting to happen. Look at who the minister of finance is. Come on sheeple, do you really think this idiot knows anything about finances?

    We all know who his financia advisor has been (but there is no need for name calling, is there?) . This advisor has been busy becoming one of Belize’s richest millionaires. In the process, he realized that Ali BaBarrow could easily be stroked and satisfied. That is what he did, and this is where we are as a nation……….. bad credit, broke and screwed.

    Enjoy it sheeple! Uncle Benji has long promoted a coup a la Honduran style, but our beloved people are too cowardly, so we prefer to live like sheep, thus we are sheeple.

  6. Seletar says:

    It was no surprise that this coupon payment has been coming for some years. UDP got elected mostly because of it, and its promise to take care of it when it came.

    Why was Barrow & Co., unable to set aside $9-million each year to make this payment?

    I guess cash burns a hole in GOB’s pocket.

    We’re ruled by reckless children at best.

  7. savy says:

    I wanted to go to Belize for my vacation, but I am worried is this going to be a problem for travelers?

  8. BMNJ says:

    Thanks to the PUP government for digging the grave for Belize and thanks to the UDP government for finishing it off by burying it. Now let me see how our leaders are going to raise Belize from the death.

  9. busha says:

    Benji, u are ar @$$ Sir.

  10. Iniate says:

    Not at all Savy, Belize is still a beautiful and great nation, like Rod says.
    We also have great opinions of how things should be done with our great nation.
    If the superbond re-structuring team is in unity, I trust that they have the best interest of Belize at heart.

  11. jose carlos says:

    I don’t think this government should be blamed for this huge bond debt we have. We should all remember that this commitment was made under the PUP and now UDP will be blamed for the ambitions of the PUP. This new government will find the money to pay at the end and we are still not at default cause we have the 30 days grace period, so let the press don’t fool you.

  12. remember says:

    Before elections PM Barrow said we are flush with cash, ham and baskets from bottom dollar store were distributed to all udps

  13. Island boy says:

    Jose Carlos is right. If we are to place the blame, let us place it where it belongs: in the hands of the PUP cronies (leaders) who borrowed so much money, took it for themselves and left us Belizeans to pay the debt. If someone should be crucified at this time, it is those PUP leaders who did it to us.

  14. Iniate says:

    Also, this whole superbond thing is not just a political thing, it is a culture that all of us Belizeans share in. In other words, don’t be wishing and point at the leaders and politicians for them to get this right, let this whole think speak to you personally on how you can adjust and do better and be wiser with your money, and make your money more productive; as a true Belizean.

    To me, the button line is that Belize got a whole big chunk of money years ago. Now we need to pay it back, and the reason why we can’t pay it back is because each one of us Belizeans were not productive enough with the money that was lent to us. We spent the money on ‘un-productive’ things, things that don’t bring a proper return. We didn’t’ properly invest the money, rather we spent it. Consumers verses producers,, yes you got it!!

  15. OW says:

    remember when briceno was asking his PUP croonies back for the millions????
    they should go as far back as when they got all this money and start showing where it all went so they can figure how to pay it back since that money came in and obviously not showing anywhere in the Jewel that it was put to good use but in their own pockets

  16. Vuk says:

    TBH, both political parties are to blame for the current situation and the reason why I say this is because they didn’t invest the money they borrowed into the right economic sectors that would have enabled them to pay back what they borrowed. Belize needs leadership that is able to make the appropriate decisions, especially the appropriate economic decisions, otherwise, as many have said and will continue to say, it *will* end up becoming another Haiti.

  17. b.Jones says:

    1st.- PUP is to blame (lets get that out the way)

    2nd.- Besides private property/investment, Belize looks like Sh!+. What was all that borrowed $ used for, during the PUP’s time in office.

    3rd.- Belize has no choice but to restructure the debt. Yes the Government might have the $ to pay but what sense do it make to pay if you can’t buy pack_bread after that. It’s better to look bad and eat than to look good while your belly empty.

    4th.- This is not the 1st attempt at debt restructuring & not the 1st time the investors are facing one. Do your homework b4 you try kill the man who was left holding the bag & who’s trying to use all “legal” avenues available to him.

    Argentina was very successful at it’s debt restructuring in 2001 & they didn’t fall into the ocean & vanished. They payed only $.30 on the $1 & the loopholes some handout xlitigants use in court has since been closed.

    So stop screaming blood murder, the world i not ending. Tighten your footsteps, pull up your pants & enjoy the bumpy ride. Big boys are now in the play ground. Barrow is now in the process of cleaning up PUP mess.

    * Hey Rod, if i knew you i would beat you with a stick call sense & kick you up with a pair of boots call honesty & fairness.

  18. Belizean says:

    Both Island boy and Jose Carlos are to be applauded in their wisdom of thought. This is exactly why we are experiencing this default possibility.

  19. b.Jones says:

    I would advise Barrow to fly some people to Argentina an research how they did their restructure & what games were played & what necessary steps were taken.

  20. Turks says:

    It is clear to me from the comments of some people above, that they have now idea of what the consequences of a default on a bond such as the super bond. This is to the time to blame anyone but if we have to then the present GOB has the responsibility to resolve this problem. if the economy has produced as projected or if the present administration had the expertise to negotiate and not dictate the problem could has been resolved. The now GOB is not part of the solution but is part of the problem.

  21. Rod says:

    You are an idiot islandboy

  22. Turks says:

    It is clear to me from the comments of some people above, that they have no idea of what the consequences of a default on a bond such as the super bond. This is not the time to point fingers but if we have to, then the present GOB has the responsibility to resolve this problem. if the economy has produced as projected or if the present administration had the expertise to negotiate and not dictate the problem could has been resolved. The now GOB is not part of the solution it is part of the problem.

  23. jehsef says:

    Why everybody pointing fingers at the party that’s running things now when this problem has been existing for years. It just shows how neglectful we are as a people n don’t want to take responsibility for our actions, instead of pointing fingers we’re all to be blame becuz at the end of the day we’re all Belizeans. Sorry to say i’m not proud to call myself one at this moment but the facts speaks for themselves..

  24. Louisville,Ky says:

    By some of the above comments, I detect a few hipocrites and some die-hards.No need to call anyone out. Whatever!!
    You all need to quit acting like the freekin sky is falling. Listen, Belize is not the first and, it definately will not be the last Nation to have to re-negotiate a loan payment…. Okay?
    Rather than rally around the Negotiators and come up with some meaningful suggestions, all you big dummies do is criticise destructively. No wonder the Country got itself in this ‘hell of a habble’ in the first place because when all the ‘tiefin’ was going on with the loan money, mum was the word coming outta all ah unnu.
    I do not need to tell you: you can not get blood from turnips. Straight like that!!
    The Man seh ‘e noh got di money, weh unnu want ih do??

  25. Alvaro says:

    1 Belize is the furthest thing from a great nation, lets get that straight.
    2. It is the work of both the previous and current Government that has us in this mess
    3 Sitting on our @$@#$ and 12$#%ing about it wont make it go away
    i think it is high time for Belizeans to start taking back the country instead of electing people who we know are morons to be our leaders and then crying when $#!% isnt getting done. I thought belize was a country where people stood for what they believed in but it seems to me that you guys just sit there and eat all the $#!$ the Government shovels into your mouths

  26. belichico says:

    honestly i think the best thing to do is to look for a solution. and stop pin pointing political parties to blame . only solutions no problems and thats going to make us better people.

  27. savy says:

    Thanks Iniate,After reading, I think that in any debt there is honor, if you own a bank money and their interest is to high , you go to other bank and ask for a loan with lower interest ,and pay the first. But if someone does not pay a debt , their credit is gone , and if there is a emergency ( like a hurricane), well ,to have credit is good. I will support by having my vacation there.

  28. Supa G says:

    Let me tell you what is going to happen nothing Belizeans are just gonna take it lying down…

  29. 501 says:

    Belize is a small country, so where is those money from the super bond is? it’s definitely not invested in the country but probably in the current and previous government packet! or to be wise and to acknowledge the financial debt you can’t say nothing rather than to ask where the money went:)…b/c our country has no kind of decent development, every little development the government does is over a million dollars witch is lone lie, wise man that walk around knows that the government is waste full and thief.

    if the government was so educated he would cut down on fuel and providing vehicle for his worker. when government talk about budget they always want to shorten poor people salary, rise tax, fuel, electricity, water etc and keep the people in poverty.

    when government invest the invest dumb for eg instead they pave street they give you white mall lone dust witch is bad for the people health, people be wise instead government eliminate poverty they give you poverty with those dusty unhealthy white that can give you cancer!

    with all this said you would know how government operate and wouldn’t be able to pay any debt at all b/c they can’t think!

    If those super bond was invested in our nation our country would be like heaven b/c belize is small for those size of money, be wise people and open your eye’s!

  30. pichy says:

    La pura verdad hermanos, como de color y hispanos. Ha llegado la hora, de unirnos, para luchar. Luchar, para el país y no uno contra otro. De mi punto de vista, creo, que somos más inteligentes de lo que nos podemos imaginar, vamos a pagar esta deuda con honor y estima, y nunca más permitiremos que bello país caiga de nuevo en esta !@#$%^!!!!. Uno es medido, por cuanto uno de puede levantarse, no por cuando uno está caído. Así que hacia el futuro en entusiasmo, heroísmo y con buena voluntad y fe para un mejor BELICE.

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