Belize seeks to make debt ‘sustainable’ by amending 2038 bonds

New York, Jan. 13 – Belize said it is seeking to make its dollar bonds due 2038 “sustainable” by amending the amortization schedule and reducing the interest payments.

To implement the changes, the sovereign announced a consent solicitation for the debt.

The government wants to change the principal repayment to three equal annual installments payable on Feb. 20 of 2036, 2037 and 2038, according to a press release.

Currently the principal is payable in 38 equal semiannual installments starting on Aug. 20, 2019 and ending on Feb. 20, 2038.

In addition, it wants to reduce the interest rate on the bonds to 4% beginning on Feb. 20 and running through the maturity date.

Currently the bonds have a 5% coupon that steps up to 6.767% on Aug. 20, 2017.

“As a result of several adverse shocks to Belize’s economy, the 2038 bonds are no longer serviceable on their current terms,” said Joseph Waight, Belize’s financial secretary, in the news release.

“The two amendments the government is proposing are, we believe, the mildest adjustments to the terms of the bonds that will still achieve the objective of putting the bonds on a fully sustainable basis.

“Belize is not asking for any reduction in the principal due under the bonds nor is it even proposing to extend the final maturity date of the instrument. The proposed amendments will only adjust the amortization schedule of the bonds within its existing maturity profile and effect a modest reduction to the interest rate.”

The government is offering a consent fee of 0.25% to holders who approve the changes.

The solicitation ends at 5 p.m. ET on Jan. 26.

Citigroup Global Markets Inc. is solicitation agent. Global Bondholder Services Corp. (212 430-3774 or 866 794-2200 is information agent and tabulation agent.

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