7 News Belize

Superbond: The “Sob Story” GOB Giving Bondholders
posted (December 6, 2016)
Last night we told you about how the Prime Minister went to New York on Superbond business along with Economic Ambassador Mark Espat, and Financial Secretary Joseph Waight. The press release from the Government was very vague, but it did say that he was to "attend a meeting... in connection with the Superbond."

As has been widely reported, government is trying to get the bondholders to restructure the Superbond for a third time because Belize cannot meet the step-up payments under Superbond 2.0. Well, we've gotten a copy of the powerpoint presentation the Government made to the superbond holders.

It's dated, "November 2016", and it outlines the financial picture of the country from the Government's perspective. It's a 22-slide presentation filled with all the figures, but a few parts which caught our attention starts on page 8. It reads, quote, "There has been a precipitous decline in economic activity in Belize over the past 2 years. Overall growth fell from a robust pace of 4.1 in 2014 to 1.0 in 2015. Earlier forecasts for 2016 suggested a further decline below 1% growth, but the economy contracted by 0.5 in the first half of the year." End quote.

Slide 9 says that the country's current account deficit has become dangerously large. The Government's estimates say that exports will decline in 2016, for the 4th consecutive year, reaching 498 million US dollars, which is 20% lower than the recent peak of 622 million US dollars. All major industries, such as Citrus and Fisheries have been hit by disease and other challenges.

Belize's foreign exchange reserves have been drained due to the compensation payments for BTL and BEL. By the end of the year, it is forecasted to reach 380 US million dollars, which is a 22% decline in only 2 years. The Government then engages in some real talk with the bondholders revealing that for BTL Belize was slapped with a 550 million Belize dollar compensation, or 275 million US dollars. As of right now, Belize has already paid 350 million Belize dollars, and owes another 200 million dollars. For BEL, Belize has paid 70 million Belize Dollars, and the previous owners retain 33% of the shares in the company.

The Government then goes about showing its cash flow and payment obligations, and one figure which caught our attention is the public debt. For 2016, the Government is reporting that the country's public debt is 2.878 billion dollars. The Government says that on the current path, the debt will increase by about 90 or more million dollars every year.

Another part of the presentation which caught our attention is this pie chart on slide number 19. It parcels out the country's national debt in the second pie chart showing that the 1.053 billion dollar Superbond, which takes up 34 percent of the national debt. Domestic Debt is 746 million Belize dollars while the official external debt is at 1.331 billion Belize dollars.

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