There's breakthrough news on the Superbond negotiations tonight. As we had alluded to earlier this week, government is revising the terms of its offer to make it more attractive to bondholders. And we are told the creditor committee supports the new terms.
And via a press release posted on the Central Bank website a short time ago, here they are.
(i) The interest rate on the 2038 Bonds is being set at 4.9375% commencing February 20, 2017 (rather than the 4.0% rate proposed in the January 12, 2017 Statement).
(ii) The revised principal amortization schedule now calls for five equal annual installments commencing on February 20, 2030 and ending on February 20, 2034 (rather than three equal annual installments commencing on February 20, 2036 and ending on February 20, 2038, as proposed in the January 12, 2017 Statement).
And,
(iii) The final Maturity Date of the Bonds is being advanced from February 20, 2038 to February 20, 2034.
Now, for its part Belize undertakes to achieve a primary surplus equal to at least 2% of GDP in each of the fiscal years 2018/19, 2019/20 and 2020/21. If Belize fails to meet that primary surplus target in any of those years, interest payments on the Bonds for the subsequent 12 months will be payable quarterly rather than semi-annually and (ii) Belize will seek the assistance of the IMF.
That is basically the new deal - which - as we said has the support of the bondholders - according to our information,. It means less savings for Belize, and less of a hit to bondholders. Now, this new offer has been made available for one week only, it expires next Friday - which could bring a close to the negotiations. Just looking at the figures off the top, Bondholders would still be taking a considerable hit, as much as 25% reduction in net present value.
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