BELMOPAN, Belize, Thursday, December 27, 2012 – Belize Prime Minister Dean Barrow has announced that the country has reached an agreement in principle with creditors to restructure about half of its unpaid debt after “long and arduous” talks.
Barrow told a recent press conference that details of the restructuring of the US$548.3 million bond would be released at a later date but he described the agreement as “comprehensive” and “sustainable”.
Belize missed an August 20, 2012, US$23 million coupon payment on its US dollar Step-Up Bonds due 2029 and earned itself a sovereign credit ratings downgrade from Standard & Poor’s, which deemed the Caribbean country to be in default on its debt. In September Belize made an US$11.7 million interest payment, although not within the 30-day grace period given by bondholders it still earned it a 60-day reprieve from bondholders. Major creditors agreed to refrain from taking legal remedies against Belize to allow restructuring negotiations on the US$550 million superbond to continue.
During that period Belize released two restructuring proposals on November 29 that asked creditors to forgive 33% of what they are owed, or allow the country to delay debt payments for 10 years but both proposals were rejected by creditors at the time.
Mark Espat, leader of Belize’s negotiating team on the debt restructuring, has said that there is now an in-principle agreement with the Creditor Steering Committee and details will be ironed out in the coming days. He explained that details of the deal could not be made public until they were explained to all of Belize’s creditors.
Negotiating with Belize is a creditors’ committee comprised of Greylock Capital Management, Steadfast Insurance Co., Capital Markets Financial Services and the Trinidad and Tobago Unit Trust Corp., as well as an ad hoc group consisting of 20 institutional members. Together, the committee and ad hoc group represent over US$338 million of the bonds outstanding.
According to The Wall Street Journal, a committee adviser who asked not to be identified said: “The committee is pleased with the progress of the negotiations over the past few weeks and will now be working with the members of the ad hoc group and the government of Belize to achieve closure.”