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GOB Inches Closer to Getting Approval from Majority Bondholders to Pay off Superbond

The Government of Belize has officially launched the Cash Buy-Out and Consent Solicitation of the Superbond. As we reported last week the bondholders were awaiting the legal document from Belize that would underline the terms and conditions being proposed for the superbond pay-off. An official release was sent out today by the Central Bank of Belize indicating that Belize would make the pay-off to the bondholders with funding from the Credit Suisse Group through The Nature Conservancy’s Blue Bond for Ocean Conservation program. The release further states that the refinancing is made available to support durable marine conservation efforts and sustainable marine-based economic activity and that the International Development Finance Corporation is expected to provide political risk insurance in connection with the Blue Bonds Financing. For all this to happen, however, Belize needs to gain at least seventy five percent of the bondholders’ approval. Up to last Thursday, some fifty percent had already given the nod in principle. A more recent development over the weekend showed that more bondholders have approved the backing of the pay-off via the Blue Bonds for Conservation program. Reuters reported on Friday that Vontobel which holds ten percent of the superbond coined Belize’s proposal as a good solution, adding that it is a positive move from a broader market perspective as countries are finding innovative way in solving debt issues. Meanwhile, Candriam which holds two-point two percent of the bond has confirmed its support of Belize’s proposal. These new approvals add to the already fifty percent approval that Belize has received. In order for the plan to go through there is a need for at least seventy five percent approval. Dr Carl Ross of the investment management firm, Grantham Mayo van Otterloo told Love News that negotiations with Belize could possibly be completed by November 19. Other investors in the Superbond that are yet to issue a comment on whether they will approve the pay-off are M&G Investments, which holds 3.5% of the bond and Austria’s Kepler Fonds, which owns around 2%.