More creditors sign on to superbond

Creditors continue to sign up for the new superbond created to restructure Belize’s external debt. According to a government press release, the requisite eighty-five percent of the holders of a bond issue due to mature in 2015 have opted to convert them to the terms of the superbond, which matures in 2029. That original hundred million U.S. dollar bond offer, managed by Bear Stearns, carried a nine point seven-five percent interest rate. Under its collective action clause, all holders of those bonds will now have to accept the new lower yields and longer maturity of the superbond, even the minority who have not opted for the exchange. Collective action clauses were introduced into U.S.-marketed sovereign bonds in 2003 for the precise purpose of streamlining debt restructures like that undertaken by Belize. According to the Ministry of Finance, this is the first time that the clause has been successfully invoked. The new bonds, which enjoyed an extremely high participation rate, will be issued on February twentieth.