Value of G.O.B.’s super bond plummets

There is startling economic news tonight which may mean plenty of trouble for the government treasury and is an indicator that the global recession is hitting home. Already affected by budgetary shortfalls and millions of dollars in losses by the recent devastating floods, the country’s economic stability is under serious threat. In mid-November we reported that the Belize Super Bonds launched in December 2006 for US five hundred and sixty-five million dollars was trading for fifty cents on the dollar with a yield of sixteen percent. Well, today the news is worst, as the bonds have plummeted and are now trading at an incredibly low thirty-seven point four cents on the dollar.

Late this afternoon, word was received from Belize Telemedia that the Hayward Charitable Trust, which is the majority shareholder of Telemedia and a charitable trust for Belizean causes, has invested in the super bonds. The trust purchased five million U.S. dollars of the government’s bonds and according to a release, “such a large discount on the face value of the Super Bonds represents a current yield to redemption of twenty-five percent and clearly demonstrates the international financial community’s lack of confidence in the Belizean economy”. The silver lining is that the Hayward Trust believes that either this government or the next one will eventually be able to bring the nation together so that G.O.B. does not have to once again default on its international obligations. In addition, the profit made on the purchase of the Super Bonds will in due course be used to support charitable causes in Belize. The release ends by saying that it believes that once the government and Telemedia reach a settlement and Telemedia is sold to an international operator, the funds released from such a sale could be used to invest further in the Super Bonds for the benefit of all Belizeans. Channel Five did not get any official reaction on what the Government is going to do about the current lack of confidence in the Belizean economy.