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Feb 19, 2013

Creditor Committee accepts new bond offer

There has been a breakthrough in the superbond restructuring. The Belize Coordinating Committee has announced that all of its members have agreed to tender their old bonds for the new exchange offer. According to AJ Mediratta, Co-Chair of the Committee, “The Committee appreciates the Government of Belize’s willingness to negotiate in good faith and to adhere to what was in the end a fair and transparent process.” The government has pledged to pay some of the cost of negotiating the new bond and the Committee indicates the new bonds have protections in place including a contingency account for trustee indemnification; a principal reinstatement in the event of a future default and a most favored creditor provision.  The Committee has been working along with an Ad-hoc group which together represents three hundred and thirty-eight million of the five hundred and forty-eight million US of outstanding bonds. That means both groups combined represents sixty-two percent of bondholders. The press release from the committee did not say if the Ad-hoc committee accepted the offer. However, the Government’s lead negotiator Mark Espat says that the G.O.B. takes the Committee at its word and the endorsement and commitment to tender, makes the attainment of seventy-five percent necessary participation, much easier to achieve. The initial proposals forwarded to the coordinating committee requested a forty five percent haircut, but government eventually agreed to a much reduced ten percent haircut at the close of the negotiations. On February twelfth, the Prime Minister took the negotiated bond to the House of Representatives.


Dean Barrow [File: February 12th, 2013]

“A twenty-five year maturity ending in 2038. This is nine years more than the current maturity under the superbond which expires in 2029. So there is nine years more and the new bonds have a maturity trajectory of twenty-five years to expire in 2038. Second key feature, Mister Speaker, there is a ten percent principal haircut off the top. So immediately, approximately Belize one hundred and eight million dollars is to be written off the current super-bond indebtedness. Third Mister Speaker, the initial interest rate coupon is for five percent lasting for four and a half years; stepping up then to six point seven-eight-eight percent for the remaining life of the new bonds. Recollect that the present interest rate under the superbond is eight point five percent. Therefore, the new initial interest rate represents a forty-one percent reduction from the current superbond interest rate. And the subsequent step interest rate represents a twenty percent reduction compared to the current eight point five percent. There is a grace period of six years before principal repayments commence, even though the bond holders in exchange for the substantial relief argued for earlier principal repayment. Government of Belize was able to hold the line and 2019 continues to be the year when principle payments begin.”


This morning we forwarded questions to the Central Bank of Belize to clarify the provisions in the new offering and how soon do they expect to reach the seventy-five percent bondholder participation threshold that the government said was necessary to close the deal. The Central Bank has indicated that a response will be forthcoming soon. But moments ago, News Five received a written response from Glenford Ysaguirre, Governor of the Central Bank of Belize. Rather than the sixty-two percent reported widely, Ysaguirre says that it is his understanding that the Creditors Committee (CC) represents holders of the value of sixty-six percent of the super bond. The Central Bank Governor goes on to say, “The government, no doubt, would be encouraged and pleased with the news that the bond holders represented by the Committee have accepted en bloc the new 2038 deal. The remaining thirty-four percent is held by other individual bond holders who are not represented by the CC and must therefore be dealt with individually by G.O.B. Under the Super Bond Class Action Clause (CAC), the new offer must be accepted by holders of at least seventy-five percent of the value of the bonds for it to be enforceable on all bond holders. Therefore, besides the sixty-six percent of the CC, G.O.B. needs the acceptance of holders of another nine percent to meet the CAC threshold of seventy-five percent. The new bond offer will stay open for three weeks at that time G.O.B. will know if it was successful in reaching the seventy-five percent threshold.”

Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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4 Responses for “Creditor Committee accepts new bond offer”

  1. Storm says:

    Hopefully this particular nightmare won’t get any worse. As long as we can make the various payments, we only have to bear this heavy burden for another full generation. What a great gift to our children.

  2. Ricky Malthus says:

    So while Barrow and Mark Espat distract and decoy us with their corrupted nonsense on the Super Bond, Barrow continues his reckless assault on the Belizean Nation by completing his alien hegemony of our judicial system, our educational system, and all the other economic, social and operating systems in Belize. How can Belizeans be duped in this manner? Where and when will all this end? Only God can help us now.

  3. sickntired says:

    Ok when the ink dry on the paper to finalise this then come back with this story. Everytime unu report it nothing final happen. What if they no reach the 75%? Plus i no clear if the burden appear lower each year but overall the extended period result in a bigger payment. Like house mortgage the longer you take to pay smaller amout each year the more you end up paying by the end. Also the bond itself da no news – tell me what govt di do to mek sure we cud pay it – grow the economy.

  4. aldo says:

    Yes the udp sucks and they are to blame for everything !! The pup are angels and saints and will be our saviours !! Until we start blaming the correct people and demanding our stolen money back we are screwed for a long time . Remember all the money was at one time borrowed and paid out. It was certainly not used on the country so someone( or a bunch of theives) stole it. PUP and Udp together. Who stole the most a matter of opinion.

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