Archive for August, 2012

Belize fails to make scheduled debt payment

Monday, August 27th, 2012

This week, the government of Belize confirmed that it could not find US$23 million to pay creditors. This sum is part of a scheduled coupon payment of a US$544 million bond deal, due in 2029, which was negotiated prior to the financial crisis, based on substantially higher pre-crisis interest rates. Under the 2007 deal, the yield increased from 6% to 8.5% in February 2012, and Belize informed that it cannot afford to pay it.

The government of Belize is now at the early stage of negotiations with creditors, with the purpose to restructure the debt under more favourable terms. Parties must do it within a 30-day period, starting August 20, otherwise Belize will default on the bond.

Following the Belize government’s failure to pay the semiannual interest coupon, Standard & Poor’s agency lowered its long-term and short-term foreign currency sovereign credit ratings to ‘CC’ from ‘CCC’, as well as rating on Belize’s bond to ‘D’. In its turn, Moody’s Investors Service changed the outlook on Belize’s ratings from developing to negative.

Belize nears Bond Default

Saturday, August 25th, 2012

On August 20, 2012, the government of Belize confirmed that it is was unable to find USD 23 million to pay creditors a scheduled coupon payment as part of a USD 544 million bond deal that was negotiated before the financial crisis, which as of 2012 pays a yield of 8.5%.

Belize has a comparatively low fiscal deficit, however, itexpected to rise to 2.5% of GDP (gross domestic product) this year, from 1.1% in 2011, the bond was negotiated based on substantially higher pre-crisis interest rates. Under the 2007 deal, which was negotiated to service half of the jurisdiction’s debt, the coupon rate increased from 6% to 8.5% this year, and is due to mature in 2029.

In accordance with the first proposal made by its creditors, Belize has been offered 20 cents on the dollar, which is substantially lower than that offered following Argentina’s default in 2001, and in the Greek bailout, which offered around 30 cents on the dollar. Nevertheless, the government of Belize said that it is committed to meeting with creditors in order to find an amicable solution to restructure the debt under more favourable terms. Parties to the deal must do so within a 30-day grace period, starting August 20, 2012, or Belize will default on the bond.

Each of three scenarios proposed by the Central Bank extend the bond’s maturity period to at least 2042, or as late as 2062.

Investment conference for Belize expats to be held in Los Angeles

Friday, August 10th, 2012

An Investment Conference will be held on August 25, 2012 by the Consulate of Belize in Los Angeles, having the purpose to provide Belizeans living outside the country with information on current opportunities in Belize, and tell them how to be involved – to become an investor and an economic stakeholder in Belize.

During the conference, presentations will be made by Development Finance Corporation (DFC), which will give information on Purchasing Homes under Foreclosure in Belize, Payment Mechanisms, DFC Mortgage Finance and Commercial Lending Programs; and Belize Trade and Investment Development Service (Beltraide), which will present on such subjects as Belize Incentive Programs of the Government of Belize, Beltraide Business and Investment Services, Priority Areas for Investment in Belize, and Showcasing Belizean Companies.