On Monday, a 26 million Belize dollar Superbond payment is due - but, best indications to this newsroom tonight are that government will not pay. That's right, all indications are that government is getting ready to default on its Superbond debt. This is after the Prime Minister and his finance team engaged in a week of intensive discussions with bondholders in New York. It seems there was no breakthrough, likely because government is not prepared to budge from its position: that the interest rate of 4% offered to creditors is fair, as is the adjustment of the amortization payment to move the bullet payments back to 2036. The bondholders have rejected that saying it's too much of a financial hit; they want government to propose a structured program to manage its financings going forward. But the two sides haven't been able to hammer out a compromise, it appears.
Today Jules Vasquez got some-perspective on this issue from the Caribbean Development Bank in Barbados. He's there for the Bank's Annual News Conference where they discuss all the regional economic trends. The Banks Director of Economics said that Government should offer bondholders some structured program:
Jules Vasquez, 7News
"Has the government been reckless in approaching the super bond negotiations with a sort of swashbuckling approach privately suggesting that when the next super bond payment becomes due, during three days, if no deal is reached Belize may default."
Dr. Justin Ram - Director of Economics, CDB
"With respect to the super bond, I don't want to comment too much on the ongoing negotiations, I think that's a matter between the government of Belize and the creditors at this point in time. But I would say that it's really important for the government to articulate a solid credible fiscal consolidation program that both the Belize people and the international creditors could buy into."
Dr. William Warren Smith - President, CDB
"That issue has to be resolved because debt overhang is not a good position to be in. And when you are in a situation where discussions are taking place with creditors, it represents a level of uncertainty also for the private sector."