The Briceno administration remains cautiously optimistic that its plans to rid Belize of the Superbond once and for all will go through. The superbond has created a black cloud over the past two administrations as they struggle to meet coupon payments. At Friday’s House Meeting it was announced that the government was in negotiations with the bondholders and new financiers with a mind to exchange the superbond for a blue bond. Prime Minister John Briceno spoke on the plan and its genesis.
Hon. John Briceno, Prime Minister of Belize: “After many months of grueling negotiations between government’s team and a committee representing major holders of these bonds an agreement in principle has been reached. With the consent of the Cabinet and the support of holders of 50% of the principal amount of these bonds this agreement calls for the bond holders to sell their claim at a very significant discount to Belize. Specifically this deal calls for a 48.3% discount to the face value of the superbond together with for those holders that tender during the offer period a payment in lieu of accrued interest on the bonds. The government proposes to raise the money for the discounted repurchase through a loan from an affiliate of the Nature Conservancy. In connection with that loan the government will accelerate it’s marine conservation policies in a manner that will dramatically enhance the preservation of Belize’s precious seas, coral reefs and fish stocks. But let me be clear in principle the agreement government has hammered out with the bond holder committee does not guarantee that our proposal will ultimately succeed. While the committee represents close to 50% of bond holders the offer will require 75% support in order to close. Government has taken the decision that this transaction must eliminate the entirety of the superbond not just part of it and under the terms of the bonds this requires the support of 75% of the bond holders. In addition government must now finalize the terms and conditions for the innovative financing being arranged by the Nature Conservancy and button up some outstanding features of the conservation partnership.”
Up to news time tonight the offer made by Belize to the bondholders has only been given the nod by fifty percent of the holders. Belize would need another twenty five percent consent in order to pay off the bond. That remaining approval is what the negotiators are now seeking.
Hon. John Briceno, Prime Minister of Belize: “If our proposals are consumated however Belize’s public debt will be instantly reduced by almost $500 million Belize dollars. To put this in perspective twelve cents of every dollar of the public debt will be eliminated. This arrangement will also direct on average eight million Belize dollars annually to marine conservation projects and upgrading the protection and management of our marine patrimony. These conservation investments will create new jobs, buttress the tourism industry, fortify the fisheries sector and catalyze a flood of NGO interest in and financing for marine conservation in Belize. And our proposals address genuine long term sustainability by way of both policy revisions and financing flows. Government proposes to capitalize a marine conservation endowment whose investment earnings over the next twenty years will grow to $184 million Belize dollars. This endowment has been designed to ensure conservation project funding in perpetuity. Fellow Belizeans the proposals we advance will usher in a new era of cooperation between our Ministries of the Blue Economy and Sustainable Development on the one hand and on the other the NGO conservation fraternity, the fisherfolk, the coastal communities and indeed the entire collective of marine stakeholders.”
Tune in tomorrow for a more in-depth look at the bonds for Belize.