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What’s Next for GOB and the Superbond ?

With the Briceno administration unwilling to bend to the IMF, they continue their efforts to get a meeting with the bondholders. According to bondholder, Carl Ross that meeting may not happen anytime soon as those meetings are held under a non-disclosure agreement which has since expired. It is due to the expiration of the agreement that the last meeting did not happen between the investors and the government. Ross noted that getting it renewed will be costly for the bondholders. He added that they are currently unwilling at this time to make that investment unless they see some promising plan from the government.

Carl Ross, Bondholder, Grantham Mayo Vot Otterloo: “Unfortunately in this new sort of hyper illegal world that we’re in it’s not convenient for bond holders to meet directly to negotiate these things unless it is under a non disclosure agreement and so that’s why we hire advisors kind of be a conduit. So we’re hopeful I mean  I think if there was a reason maybe a change in position or whatever then we would be more than willing to meet with government over the next thirty days but I think bondholders in general are reluctant to do so unless we think there’s a strong likelihood of good progress. Because there are complications with us to signing these non disclosure agreements. There’s no principal due on this bond until 2030 it’s only interest and again that’s the way we structured it the last time we did this and that represented, that structure which was interest only until 2030 represented a very very significant haircut to bond holders but we said well that’s a good way for us to ensure that at least we’ve taken a big haircut but at least we shouldn’t have to do this again. And by 2030 when the principal comes due, we thought, Belize will have developed a reputation for paying its bills and it will have many financing options available to it by 2030 to refinance those principal payments coming do; that’s what we thought at the time.”

Seven million US dollars is the amount that is due for the month of May. Another seven million will come due in August, and another tranche in November. But all things considered, isn’t seven million US dollars a small price to pay in rebuilding the country’s credit worthiness?

As we reported last night, the Government of Belize issued a statement saying that they are asking to be given up until September 19, 2021 to make good on this coupon payment due this month. The issue with that is that by September 19, the 30-day grace period for another coupon payment would expire. It is a process called, consent solicitation to the bondholders, and is left to be seen if the bondholders will agree.