Archive for the ‘National Debt’ Category

IMF released statement upon consultation with Belize

Tuesday, July 23rd, 2013

The executive board of the International Monetary Fund concluded the Article IV consultation with Belize. In their assessment, the executive directors congratulated the authorities on the strong economic performance during the last year and the successful completion of the external debt exchange. They also noted, however, that the economy of Belize still faces substantial challenges, and encouraged the authorities of the country to pursue active debt management, accelerate financial sector reform, and strengthen economy’s resilience to external influences.

The directors spoke about the need of fiscal consolidation while protecting such priority areas as infrastructure, internal security, and social programs. Given uncertainties about the potential liabilities associated with the nationalization of public companies, they encouraged the authorities to take additional measures as necessary, with a view to ensuring fiscal sustainability.

Also, the executive board welcomed plans of Belize authorities to improve the debt management framework, and the progress on financial sector, but also spoke about the need to further strengthen the Anti Money Laundering/Combating the Financing of Terrorism framework.

Directors called on the authorities to advance structural reforms, focusing on removing impediments to private investment, boosting competitiveness and jobs, and promoting inclusiveness and the diversification of exports and energy sources.

In 2012, inflation in Belize was 1.4%, the external current account deficit increased to 1.7% of GDP. However, partially due to strong foreign direct investment inflows in the sugar sector, international reserve coverage is estimated at 3.4 months of imports up from 3 months in 2011. Unemployment rate is at 16%. After two years of decline, credit to the private sector recovered in 2012.

The Belize government’s completion of the exchange of its “super-bond” for new US dollar denominated bonds due to expire in 2038 brought substantial cash-flow relief – about US$130 million over the next 5 years.

Belize restructured superbond approved by House of Representatives

Wednesday, February 13th, 2013

On February 12, the House of Representatives during a special sitting passed the bill on the restructured superbond. The bond went through all three readings, and now it should be approved by the Senate. During the debates in the House, Prime Minister of Belize Dean Barrow disclosed that there is an extension in maturity of the superbond, meaning there is about a decade added to the payment plan. He also said that there are over a hundred million US dollars written-off the debt, and current payment rates are 40 per cent lower than those under previous terms. The restructured deal also included the capitalization of the interest received from partial coupon payments in late 2012.

The deal was expected to cost about sixteen million dollars, but the Belize government will pay only three million Belize dollars to close the restructuring exercise.

During the discussion, the Opposition said that it had not been privy or consulted on the new terms of the superbond. The Leader of the Opposition, Francis Fonseca, pointed that the government might have negotiated a better terms of the deal if they were involved in the negotiating process.

Belize government almost completes superbond renegotiation

Tuesday, January 29th, 2013

Last week, Prime Minister of Belize Dean Barrow along with Co-chair of the SuperBond Creditor’s Committee A.J. Mediratta held a joint press conference where announced that the terms of the renegotiated superbond is almost complete. It became known that the general economic terms of the restructuring have been agreed.

Mediratta had personal discussions with the Prime Minister on some issues. Speaking at the press conference, he said that the negotiation process has now moved to becoming conciliatory, and noted that Belize wanted to pursue the negotiations in good faith.

Prime Minister did not name the exact terms of the renegotiated Superbond, but said that there are significant savings that will materialize as a result of the new terms. In 2012, they will be $US11mln, and in 2013 they will go up to US$33mln. In 2013-2017, the Belize government would realize cash flow savings of about US$118mln, and they would achieve up to US$247mln between 2013 and 2022.

Belize reached agreement on restructuring bond

Monday, December 24th, 2012

Last week, it was announced by Prime Minister of Belize Dean Barrow that the government of Belize reached an agreement with creditors concerning restructuring of the $544 million bond – that is approximately one half of total unpaid debt of the country. This agreement that followed long negotiations allows the country to avoid default.

Details of the restructuring will be released at a later date. Mark Espat, the leader of Belize’s negotiating team on the debt restructuring, explained that details of the deal could not be made public until they were completely explained to all of Belize’s creditors.

In August 2012, Belize missed US$23 million coupon payment on the country’s Step-Up Bonds due 2029, although in September it made an $11.7 million interest payment.