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Aug 28, 2012

P.U.P. hopes for successful bond renegotiation

Francis Fonseca

Fonseca also spoke on the risks associated with government’s approach to the debt restructuring, but says the Opposition is hoping for successful negotiations and a sustainable solution for Belize.

 

Francis Fonseca, Leader of the Opposition

“Certainly, after the thirty day period I think it is open to the bondholders to move in a completely different direction—we hope they don’t. I mean, they can decide well we don’t want to engage anymore, we want to pursue legal action against Belize. We certainly hope that is not the case, so we hope that between now and the nineteenth of September that there is positive engagement, that there is an opportunity for the government’s team to meet with the bondholder committee and as many other bondholders as possible to try and discuss in a very open and frank way, the indicative scenarios that have been placed before them and to find out exactly what are the difficulties and challenges keeping the bondholders from accepting any of these specific scenarios. Is it the coupon rate? Is the maturity period? Is it too long? Is the haircut too much? Obviously and as we expect, these creditors are engaged in making money. Their business is making money for their companies and the people they represent so obviously they will try to drive a hard bargain. So in some respects I appreciate the sort of low ball, if you like, as they describe it, that the government has started with; it’s a negotiating strategy. As I said, the risk is that they feel that the government is playing games or acting in bad faith. That, I see as the primary risk. If they lose confidence in the government and the debt team and they feel that we’re wasting our time talking to these people because they’re not giving us the true facts or they’re not being upfront and acting in good faith, then all bets are off; we don’t know what will happen. So we hope that doesn’t happen and we hope there is a positive engagement and we hope I think at the end of the day, as with most of these negotiations, that we will end up with a solution that’s somewhere in the middle and certainly we hope that it’s much more on Belize’s side than on their side because whatever savings we can generate obviously can be put to productive use in Belize’s economy.”

 

Fonseca says they have engaged the members and supporters of the party, and are encouraging them to see the importance of the restructuring process, rather than looking at it as a political issue.

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