7 News Belize

AJ Meditratta; Various Positions
posted (January 24, 2013)
Earlier this week you saw AJ Mediratta appear alongside the Prime Minister at a press conference. He's the Co-chair of what's called the creditors Committee, the group that represents over 50% of the owners of the Superbond.

And while it is the first time we've had a face-to-face encounter with Mediratta, in a sense, he's no stranger to Belize. That's because Mediratta was at Bear Stearns in the early oughts when Belize's bonds first went to the market. As is now well known, that borrowing was unsustainable, and in short order, those bonds had to be re-structured - and packaged into the albatross we now all know as the Superbond which was launched in 2006.

And so we were suitably surprised to see Mediratta appear now at the other end of the table for Superbond 2.0 - representing the bondholders -some of whom bought those bad bonds, marketed by Mediratta and Bear Stearns in the first place. We asked him about that neat transition:...

Jules Vasquez
"You were involved in the Bear Stearns 2 bonds; US1.5 million and US100 million and I think Bear Stearns is also involved in the "designated design insured loans" amounting to 96 million - those are the Zurich ones, I presume. I don't know how often this happens in the world of finance but it is unusual that one is able to work both ends of the table. You were involved in set up of a large part of the Superbond and now you are involved in the renegotiation. Were you not aware then that these bonds were unsustainable?"

AJ Mediratta
"My recollection of all the transactions we did for Belize was that in every instance I remember, we were helping Belize re-finance higher cost debt with lower cost debt. I think we had no reason to think that it was not sustainable but then very few people saw the 2008 crisis coming. That caused crisis for everyone and in fact that's really part of the genesis for why I am saying that we had a lot of sympathy for Belize."

Jules Vasquez
"Sir, what caused the Superbond crisis in Belize was not the 2008 global financial crisis. What caused it were events that preceded (2008). There were fundamental flaws from my view as an observer; that was the time everyone felt there was an endless supply of money and for Belize, the paper was junk from the start and you were right there."

AJ Mediratta
"We were one of many banks that were there and I can't speak for what happened. It's money that we gave to the government that we, like any client, we assumed that both side will act in good faith and that they know what they are doing."

A listing of the Superbond debts shows that it is made up of, partially: 2 Bear Stearns bonds, as well as one from the Royal Bank of Trinidad and Tobago Merchant Bank Limited for US 76 million.

It is worth noting because since then Bear Stearns had an epic collapse and the Royal Bank of Trinidad and Tobago was acquired - both in 2008.

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