Moody’s Investors Service lowers Belize Credit Rating

Going into the election, the Superbond has become a major issue that both political parties are flogging. A few days ago, Standard and Poor’s, lowered the country credit rating to CCC plus. Tonight, another agency, Moody’s Investors Service lowered the credit rating one notch further into junk territory and there is a possibility that it could plunge even lower. Moody’s cited increased concerns of another possible debt restructuring. The credit status now stands at a historical low of Caa1, which denotes highly speculative credit. According to Moody’s, the recent statement from the Prime Minister suggested that the current government will want to modify the original conditions of the five hundred and forty-seven million dollar Superbond, which is equivalent to half of the government debt. Moody’s says that “Superbond debt service has been rising due to coupon step-ups and will continue to increase once the debt begins amortizing in 2019. This will put further pressure on Belize’s generally weak public finances. The coupon on Belize’s Superbond began at four point two-five percent and is scheduled to jump to eight point five percent later this year.” Managing increased debt service payments, says Moody’s, poses significant financial challenges for Belize, which already faces weak economic growth prospects and expectations of declining oil royalties—a key source of government revenue.