Archive for January, 2007

Belize makes Debt Exchange Offer

Tuesday, January 9th, 2007

On December 18, 2006, the Government of Belize launched an offer to exchange the country’s outstanding commercial indebtedness in return for new USD bonds to be issued by Belize.

The financial terms of new bonds have been previously announced by Belize in a press release. Briefly, they include a final maturity falling due in 2029, equal semi-annual principal amortizations commencing in 2019, and a step-up coupon structure with annual interest payments set at 4.25% for the first 3 years after issuance of the bonds, 6% for years 4 and 5, rising to 8.5% in year 7 through to maturity.

Before the exchange offer, the Belizean authorities had 4 months of intensive consultations with the affected creditors.

The launch of the transaction was approved in the middle of December. Tenders by the creditors are due until January 26, 2007. The transaction is expected to close during the 3rd week of February 2007.

Financial advisers to Belize Government in the transaction are Houlihan Lokey Howard & Zukin.

CDB Approves Country Strategy Paper and 2 Loans to Belize

Thursday, January 4th, 2007

On December 14, 2006, the Board of Directors of the Caribbean Development Bank (CDB) at its meeting in Barbados approved the Country Strategy Paper for Belize for the period 2007 – 2009. Also, the Bank approved a USD 25 million Policy Based Loan for Belize and a USD 12.6 million loan to finance the upgrading of the Placencia Road.

The main objectives of CDB’s Strategy for Belize during the 2007-2009 period are to enhance sustainable economic growth by means of the following:

  1. supporting attempts to correct fiscal and external imbalances;

  2. financing investments that are critical for enhancing growth;

  3. lending to eligible private sector entities;

  4. financing critical social development projects.

Also, CDB’s assistance will look for good governance promotion and fostering inclusive social development.

The Policy Based Loan amounts to USD 25 million. It is comprised of:

  1. USD 15 million from CDB’s Ordinary Capital Resources (OCR) (this portion of the loan is to be repaid at a variable interest rate which is currently 6.25% per annum, in 20 years, including a grace period of 5 years);

  2. USD 10 million from CDB’s Special Fund Resources (SFR) (this portion of the loan is to be repaid at an interest rate of 2.5% per annum, in 25 years, including a grace period of 5 years).

The Policy Based Loan is aimed at supporting the efforts of the Government of Belize to address the correction of the fiscal and external imbalances. It should help the Government of Belize close the gaps over the short to medium term while implementing corrective measures, which include the restructuring of the debt, the reform of tax regime and the control of public expenditure.