An Opportunity to Invest in Belize City’s Development

If you’re looking to invest your money in Belize City and support its infrastructural development while earning lucrative returns, municipal securities might be your best bet. Today, the Belize City Council hosted a public investment forum to pitch these securities to potential investors. While tax revenues mainly cover operational costs, funds for capital projects need to come from other sources. Sure, the council could go to the bank, but that’s too costly. Instead, it turns to public investors to sell papers, notes, and bonds. News Five’s Paul Lopez was at the event and filed this report.

 

Paul Lopez, Reporting

Municipal governing bodies like the Belize City Council need funds to carry out infrastructural projects that enhance the quality of life for residents. Unfortunately, the money collected from taxes just isn’t enough to cover these big projects.

 

Bernard Wagner, Mayor, Belize City

“The taxes is used for your day to day operation, but if you are engaging in capital projects, huge projects, street infrastructure, parks and playgrounds, expansion of your e-mobility project, you need significant capital and you will never be able to get those capital on a day to day basis from property taxes, trade license, liquor license or traffic fees.”

 

Enter municipal securities. Simply put, investors can lend money to the municipality and, in return, receive interest payments along with the principal amount at a specified time.

 

Bernard Wagner

“These investments will allow us to pave more streets. I was being to the CEO of Chamber and she was telling me that Coney Drive need fix. Steve mih the tell me that Mercy Lane need fix. That is why we need your support. These investments will allow us to pave improve drainage and create spaces that foster community development and growth.  We can build upon the one hundred and fifty streets rehabilitated in 2023 and 2024 by prioritizing the use of concrete ensuring greater durability and enhanced climate resilience. These investments will shape the Belize City of tomorrow.”

 

Today, the Belize City Council hosted a public investment forum to secure buy-in from investors for future securities. So, why not just borrow the money from the bank to complete these projects? According to Abigail Castellanos, a financial analyst at Legacy Fund Limited, it’s cheaper for the council to raise funds through securities. Plus, it offers attractive interest rates to lenders.

 

Abigail Castellanos, Financial Analyst 2, Legacy Fund Limited

“The interest rate for these municipal securities will typically range from four-point five percent and as high as seven percent, with an equal weighted average of five-point seventy-five percent. Now, compared to the bank loans which are at eight-point forty-five percent plus a premium of one percent that the banks might set on that loan, the council saves between two-point forty-five percent and four-point ninety-five percent in their borrowing cost. And it is not only the issuer that benefits from the lowering borrowing cost. Investors get to benefit by earning higher interest compared to the traditional saving accounts. Municipal securities offer interest rates between four-point five percent and seven percent, which is far higher than the zero point ninety-three percent that is offered by a standard saving account.”

 

The Belize City Council is gearing up to issue a new series of municipal bonds soon. These bonds will have maturities ranging from five to twenty years, with interest rates between 5.75% and 6.5%.

 

Abigail Castellanos

“Investors don’t only benefit from the high returns. They also benefit from the tax-free feature of the municipal securities. So, the interest you earn on your municipal securities are exempt from income tax, business tax and stamp duty. Municipal securities are also considered a low-risk investment.”

 

Bernard Wagner

“In the Belize market, the last time we check their was close to seven hundred million sitting in the banking sector and those funds can be utilized to drive development within a city, especially like Belize City which is a growing city.”

 

Reporting for News Five, I am Paul Lopez