Reprinted from Caribbean Net News
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Belize says most bondholders accept debt restructuring plan

Tuesday, February 6, 2007

by: Lester Pimentel

USA (Bloomberg), NEW YORK: Belize said most of the country's bondholders have accepted a restructuring offer.

Holders of 93 percent of Belize's debt agreed to exchange their bonds for securities that mature in 2029, according to a press release. The bonds will pay an interest rate of 4.25 percent in the first three years, 6 percent in the fourth and fifth years and 8.5 percent thereafter, Belize said in the statement.

"The level of debt relief requested by Belize was necessary and proportionate to the financial situation facing the country," National Development Minister Mark Espat said in the statement.

Belize said on August 2 it would seek to restructure its $960 million of international bonds. Belize spends more than 27 percent of government revenue on servicing its debt, according to Standard & Poor's.

The yield on the country's benchmark 9.5 percent bonds due 2012 was unchanged at 19.12 percent in New York last week, according Royal Bank of Canada. The bond's price, which moves inversely to the yield, was 68 cents.

On December 7, Belize's foreign currency rating was lowered to selective default by Standard & Poor's after the government proposed the bond exchange. S&P lowered Belize's long-term foreign currency rating to SD from CC and reduced the rating on the bonds in the proposed exchange to D from CC because the exchange would cease interest payments on the bonds.

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