Government to make first Super Bond payment
There are several issues of interest that have come out of Tuesday’s cabinet meeting. There will be a changing of the command of the Belize National Coast Guard on Friday August fourteenth. And on that same date, a ceremony for the groundbreaking and contract signing for the phase-one reconstruction of the Marion Jones Sporting Complex will occur on site. Seeing that Independence is little over a month away, plans were discussed for hosting the Inaugural ceremony on the island where Baymen and Africans, side by side, fought off Spaniard Invaders, that is at St. George’s Caye on September first. Cabinet was updated on a trade mission to Central America which was led by the Ministry of Agriculture and Fisheries. The Belize mission met with counterparts in El Salvador and Guatemala. But the most important issue of national concern that was tabled was the Super Bond. The Super bond casts an ominous shadow over the country’s economic future. Prime Minister Dean Barrow spoke to News Five via phone today and discussed the twenty three million dollar interest payment that the government must pay by next week Thursday to service the one point one billion dollar Super Bond.
Prime Minister Dean Barrow
“The super bond is about one point one billion Belize dollars. We pay interest at the rate of four and a half percent. It steps up next year to about six percent. What that translates to is that we are currently paying around forty-six million Belize dollars annually to service the super bond next year. And with the increase in the rate of interest it goes up by ten million U.S., twenty million Belize to sixty-six million Belize dollars. And then in a couple of years thereafter, the interest rate steps up again to about eight percent. That will then mean of course an increase from the sixty-six million per year that we would start paying from next year to whatever that will translate to, but it will be another significant, maybe another ten million or so U.S. dollars per year more.”
Jose Sanchez
“For the year coming, is it possible that we can afford to pay this, is it in the budget?”
Prime Minister Dean Barrow
“Well, the budget for the current fiscal year included the payment of the super bond. That payment for the current fiscal year is due this week, either this or next and of course we are able to pay it. Next year it will be vastly more difficult because of the increase in the amount from forty-four to sixty-six million dollars and we will have to then raise additional revenue in order to be able to service the Super bond next year. The problem is that apart from the payments that you have to make until the maturity point is reached, when that maturity point is reached there is a big bullet payment as it is called. I don’t have the exact amount of the bullet payment but that is another whole story by itself. How are you going to be finding a bullet payment, which will of course be multiple times greater than the annual payments. How are you going to be able to find the money at that time is something that all of us must struggle to contemplate. But fortunately, that’s a ways off, I mean you’re looking at least the next ten years before you have before you have to think about the bullet payment.”
Prime Minister Barrow says that assuming the bond continues to be serviced on schedule; payments will continue to be made until 2029.
