Superbond Consent Offer Extended Again; S&P Sceptical, Lowers Ratings

Earlier this week, the Government of Belize announced deferral of the coupon payment of almost twenty-six million Belize dollars to holders of the Belize 2038 Bonds. Officially, the plan is to continue seeking an agreement with the bondholders, and on Thursday, the Government moved to extend the period during which holders of the bond may respond to the January twelfth Consent Solicitation Statement. The new expiration date is Wednesday, March eighth at five p.m. New York time, an hour ahead of Belize. There have been no changes to the statement, which calls to amend the amortization schedule of the Bonds to make the outstanding principal repayable in three equal, annual instalments starting in 2036. The second amendment would fix the interest rate on the Bonds through maturity at four percent per annum; the interest rate is currently five percent and stepping up to six point seven-six-seven percent on August twentieth, 2017. In related news, Standard and Poor’s rating service has lowered Belize’s credit watch rating to negative, which will be maintained regardless of whether the Government makes the payment within the thirty-day grace period. It also signals that it will treat any restructuring as a ‘selective default’ due to distress, and maintained its current ratings and outlook of CC/Negative for Local Currency; C for short-term foreign and local currency ratings and CCC plus for long-term foreign and local currency ratings. These were all downgraded following the Government’s announcement last November of plans to restructure the Superbond.