Senator Lizarraga also expressed little or no confidence in the will of bondholders to agree to restructure the Superbond for a third time. As we've reported, the bondholders committee rejected government's offer to reduce the interest rate to 4% and defer principal payments until the year 2036. The business senator says they bondholders have no incentive to take the deal:...
Hon. Mark Lizarraga, Business Senator
"We are still questioning what motivation the bondholders have to renegotiate. Why would they want to renegotiate really? Unless it was for a better deal for them. So, we will watch this very closely, and, of course, hoping that the government can achieve some cash flow reprieve, but as well some significant savings. And we really don't see the bondholders motivated to move in that direction, really. Their motivation is that it's trading at 42 cents on the dollar. 40 cents. 40 cents on the dollar, soh obviously the market knows you're holding something close to junk.
"The thing is that we have not kept our word, have we? I mean, we've had to renegotiate several times, we've said that the cash flow savings we would receive would be put to good use and it hasn't. so the bondholders are saying now, what credibility do you have really - you have to come to me with some sort of medium term strategy."
Government's offer to bondholders remains open until next week Thursday - and there is expected to be some negotiation during that time.
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