Superbond payment on near horizon; recent report worrisome

From gold to Superbond; a coupon payment of forty-six million dollars is due on the twentieth of August and the eyes of credit agencies are on Belize to see if it will be met. Bloomberg BusinessWeek today described Belize’s notes as the worst performers in emerging markets this month since the dollar bonds fell by two point five percent. That is attributed to the massive deficit in the national budget, and there are concerns that bondholders will suffer losses in the second restructuring of the debt in five years. The August payment will swell the budget deficit from one point one percent to two point five percent of GDP next year. The article quotes AJ Mediratta of Greylock Capital Management, who is leading negotiations for a group of investors who hold about three hundred million dollars in bonds and says, “The country has the money to make this coupon payment. We know it is there.” While, there hasn’t been much word from the government on the progress of the negotiations, Latin America Strategist of Nomura Securities International, Boris Segura, says it will be very difficult to have the debt restructuring wrapped up by August twentieth and if GOB is trying to reach an amicable agreement, it has to be current with the debt. The Superbond is five hundred and forty-four million dollar and accounts for about half of national debt of one point two billion dollars.