$20 Million Municipal Bond launched
The Government has suffered a major setback in the re-structuring of the US five hundred and forty-four million dollar super bond now that the IDB will not be guaranteeing the Policy Based Loan. But the City today went public with the prospectus for a twenty million dollar bond. The mayor of the City is inviting investors to buy into the bond; monies that he needs for infrastructure projects including major ongoing street upgrades. As far as it is known, the Social Security Board, which is flush with cash, will be buying in. The terms of the bond were released this morning and News Five’s Isani Cayetano reports.
“The Central Bank of Belize, acting as Selling Agent for and on behalf of the Belize City Council, hereby offers for sale to the public up to $20 million Belize worth of bonds being offered at a price of $200 Belize for each block of bonds.”
Isani Cayetano, Reporting
Darrell Bradley
The Municipal Bond Prospectus 2012, a milestone achievement for Mayor Darrell Bradley and the Belize City Council, was formally launched today. Since its introduction to the Belizean public in June, the initiative by local government to put forward a bond, to be used for further infrastructural works, has undergone a lengthy process.
Darrell Bradley, Belize City Mayor
“The Municipal Development Bond, as it is called, is a first of its kind in Belize. It’s actually the first municipal bond that has been done by any municipality in the Caribbean region and we feel that coming to this point it is a monumental step.”
The timeline leading up to the unveiling of the brochure included the ratification of the Belize City Council Municipal Bonds Act, which paves the way for a twenty million dollar public investment. Approval to float the bond was officially given by the Ministry of Finance a week ago.
While City Hall is keeping its doors open for potential investors to buy into the project, it is using its current track record of having reconstructed thirty-three streets as its primary sales pitch. The bond, says Mayor Bradley, goes beyond building or upgrading street conditions.
Darrell Bradley
“As a city, our vision is not to build streets. Our main vision is really to promote economic development within our community space and the bond is part of that vision. The bond is only one component of several other components that when we sat down and we assessed what really we wanted to accomplish within three years, we want to see Belize City as being the commercial capital, that Belize City really regains its glory and it regains its prominence as being that gateway for the country of Belize.”
To achieve that goal CitCo will apportion its monthly government subsidy, as well as revenues from the arrival of cruise tourists, to the Central Bank of Belize, as funds reserved to pay its debt.
Darrell Bradley
“The city council, by law, has assigned the most reliable sources of its revenue, which is the subvention that we receive from the central government and the cruise ship head tax and those monies will be paid directly from the Ministry of Finance into the Central Bank of Belize to capitalize the sinking fund. And, that will then manage the repayment to bondholders so that no bondholder has to come to the mayor or council for any of their interest payments or their principal payments.”
That sinking fund, nonetheless, will create a shortfall of fifteen percent of CitCo’s seventeen million dollar annual revenue. To offset the loss, a new residential garbage collection fee will be tacked on to monthly water bills beginning mid-December. Property tax has also increased moderately.
Darrell Bradley
“We will need to replace the revenue that we will lose from the subvention and from the head tax and the prospectus summarizes how we’re going to do that. A main thing that we want to do is the residential garbage fee and what we are talking about here is a ten dollar fee that we are going to charge per household per month, and this will assist us in making up the revenues. When you look at the monies that we will pay for debt service and the loss of revenues—in terms of the combined head tax and subvention—that only amounts to roughly fifteen percent of our total revenues. That’s only roughly two point five million dollars out of seventeen million dollars that we take in every single year. So the debt service for this bond is not a significant amount.”
Mayor Bradley reiterated that buying into the municipal bond is a worthwhile investment for any Belizean. Reporting for News Five, I am Isani Cayetano.
Rather than state that the muni-bond is a ” milestone” in Bradley’s achievement, Belizeans must be made aware that this bond will be a “gravestone” in the economy and their ability to consume essential vitamin victuals. The mayor doesn’t know nor understand that by selling bonds in an economy in death throes will further contract , reduce or constrain growth of demand and add more inflation in prices, not to mention the stupid increase in city taxes. And as is customary, SSB’s money, the poor people’s money is there to lend and spend. So who benefits from this grotesque, Augean exercise? Bradley, the streets but Belizeans pay with unemployment benefits from SSB. Oh, I forgot . Workers pay into the system but get nothing back. Only employees obtain mortgage loans at concessionary rates. This BS is too sticky to continue . I just wonder which one of his friends will benefit most from this contract and how much he will get at the front end and back end. This is a sick country.
Malthus hit the nail on the head on this municipal bond.
He won’t get a penny of foreign money for this bond, so it all must come from Belizeans foolish enough to believe they will get some money back.
I just don’t think Mayor Bradley has shown he is able [or willing] to manage money wisely.
True, while in charge of the City’s budget he has paved some streets. [Did he get paid kickbacks for hiring the contractors? Did any money stick to his fingers? Too soon to know.]
BUT AT THE SAME TIME HE SIMPLY STOPPED PAYING THE REGULAR BILL FOR COLLECTING GARBAGE? WHERE DID THE MONEY GO THAT HAD BEEN BUDGETED FOR GARBAGE COLLECTION?
I think Bradley has had too hard a time spending the City’s treasury wisely and honestly so far. I personally think he should not be burdened with having to be the steward of any bond money. It is beyond his ability to do properly.
Tell me something. Which situation is worst: To be indebted to the tune of $1 billion dollars and have nothing to show for it, or borrow $20 million and continue pave the streets. Am just askin……..
Do you have any idea why Chetumal for example, is years ahead of the entire country of Belize in terms of infractural development? What…. you thing all that just fell out of the sky? And we are not even talking yet about the political corruption and cronyism that is the order of the day across the River Hondo.
I think Mr. Bradley is sincere and he has a vision. He needs your support so, this is the time to put your money where you are putting your mouth. Either PUT UP, or SHUT UP !! straight like that.
You either get stuck in a mud HOLE @MALTHUS, or you shut up and be happy that this guy is
doing something for this country…
@Belizean and Louisville,Ky :You people must shut up because you know nothing. How about the equally bad choices to elect to die- by gun, machete, or poison ? or you have $200 dollars to buy food for your starving family or buy muni-bond so you don’t wallow in a mudhole? I always said there is a way, if Bradley and his advisors understood economics, how to solve this enigma . But Bradley has chosen the stupid , uneducated way of doing it. Admittedly, it is a mere $20 million but added to the Superbond, the other Super Bond Barrow created in one fell swoop by acquiring BEL and BTL and the internal debt of $610 million US, you can appreciate that Bradley’s action, while his intentions are good, will not pass the muster. It can be done but this is not the rational way as it is like cutting off your feet to look admiringly at marble streets. As to Chetumal, the Mexicans have a culture of hard work, thrift, and excellent educational system that they have their own nuclear scientists in Veracruz. So show me @ Bzean and Ky, how you can fit in or you just have mouth . So put up or shut up !!
@Louisville,The reason Chetumal is far ahead of Belize is because of the greedy Ministers.They are too damn greedy and they get away with white color crime.They don’t think about the country, all they think about is how to make themselves richer.Belize is only going deeper and deeper into the shat hole.
Any idea on how the hell HE will pay back?
Experts, please tell us, how CAN HE pay back?