“Super” Bondholders Uneasy With “Unprecedented” Third Restructuring
The Prime Minister disclosed two weeks ago that the superbond is being renegotiated for the third time because the economy had underperformed. There were not much details available, but today, we spoke with the Special Advisor to the Coordinating Committee of Bondholders via phone. Charles Blitzer says that stockholders are uneasy going into a third restructuring of the Super Bond, in light of present economic conditions facing Belize. Blitzer explained that the group of bondholders are concerned that a third version of the mounting national debt is unprecedented. Those bonds were issued as a result of a restructuring completed by the Barrow administration in March 2013 which has provided Belize with over one hundred million U.S. dollars in relief to date. According to Blitzer, while they are prepared to listen to government’s proposal, they are also taking into serious consideration recent reports issued by the World Bank and IMF.
On the phone: Charles Blitzer, Blitzer Consulting
“The group is under formation. It’s got a core group of significant bondholders who know Belize well and as we mentioned in the announcement, we are acting in response to what the government says is its intention to seek some sort of a restructuring, welcoming the formation of a committee. At this point we don’t know exactly what government has in mind and we’re in listening mode, not in negotiating mode yet.”
Isani Cayetano
“Granted. Is there any concern among the bondholders seeing as though this the third time a restructuring is being sought by the Government of Belize?”
On the phone: Charles Blitzer
“Yes, I think it’s fair to say there is some concern. Restructuring the same bonds twice is very rare, restructuring three times is I think, perhaps unprecedented. So there is concern why and, you know, we’re open to listening to more.”
Isani Cayetano
“Can you speak to us with some degree of certainty, you haven’t gotten a chance as yet to listen to what the government has to say, you mentioned to me that you guys are still open to hearing what the government has to propose. Is there any position insofar as the bondholders going into this meeting or into this listening process?”
On the phone: Charles Blitzer
“Well I think the basic position is that first of all we intend to follow very carefully the well established best practices in relations between governments and creditors, including bondholders. These are incorporated among other places in the G20 endorsed principles as it’s called and that’s our basic position at this point. There isn’t much information about what the government wants to do and why. We’re cognizant of various issues facing the country and cognizant of the recommendations that the World Bank made in its last review which was published a short time ago.”
Isani Cayetano
“Taking into consideration your cognizance of the present economic climate in the country and what have you, will it be considered that there may very well be austerity measures on this end insofar as Belizeans either having to pay more taxes or what have you to meet the requirements of the Super Bond 3.0?”
On the phone: Charles Blitzer
“Well I think that in the IMF Report they lay out a variety of measures, both in terms of fiscal side and in terms of structural measures which could have a significant impact in terms of both. And so we are cognizant of all of that but the issues that are laid out in the IMF Report go well beyond the bonds. There are a number of other pressures on the balance of payments, on the fiscal that go well beyond the bonds. At this point it’s not clear why the focus is on that.”
