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Oct 26, 2021

Sayonara Super Bond, Enter Blue Loan Agreement

The Briceno administration is making good on its word, following an announcement on September third, that government would be working to restructure its external indebtedness by retiring all of its U.S. dollar bonds due in 2034. This would bring some finality to Belize’s crushing Super Bond. By entering into an agreement with The Nature Conservancy, the government would seek to achieve a sustainable debt position and achieve certain marine conservation objectives. The House of Representatives met today in special session and among the bills that were tabled was a resolution authorizing the purchase and redemption of G.OB.’s U.S. dollar bonds. The proposal came before parliament this afternoon as the Blue Loan Agreement, the Conservation Funding Agreement and the Ancillary Agreements Motion 2021. It’s a move that will see over half a billion Belize dollars being struck off from the country’s external debt.  Prime Minister and Minister of Finance John Briceno introduced the bill and explained what it means in terms of huge savings.


Prime Minister John Briceno

“The results of our negotiation. That forty-five percent discount will wipe away two hundred and fifty-seven million U.S. dollars or more than half a billion Belize dollars that Belize owed from principal, capitalized interest and past due interest. And the principal reinstatement has been averted, that’s another fifty-eight point four million U.S. dollars that we averted by these negotiations. Therefore, the total debt reduction, including the principal reinstatement we dodged is a staggering three hundred and fifteen million U.S. dollars.  The motion and the bill today request this chamber’s authorization to pay off at the discount bondholders who have tendered their holdings. Those holders who have not tendered will have a period of two years to collect. At last report, eighty-seven percent of bondholders had, by tendering, endorsed Belize’s offer, far exceeding the seventy-five percent super majority our team had sought. The money to pay off the Super Bond is coming from the Blue Bonds, a financing mechanism designed by TNC, the Nature Conservancy and their banker, Credit Suisse. Belize will access some three hundred and sixty-three million dollars of these bonds for the following purposes: three hundred and one million for the discounted repayment of the Super Bond, twenty-four million to pre-fund a marine conservation endowment account, eighteen million set aside as an original issue discount in order to facilitate a lower interest rate.”

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