Is the renegotiation called Sueprbond 3.0 a good deal for Belize or not. Last week you heard two different version, one form the Prime Minister and the other form the leader of the opposition. Today they went head to head in the house. Here are the conflicting views:
Hon. John Briceño - Leader of the Opposition
"The Prime Minister was saying that they had a net present value gains of, I think, about $400 million that in effect you mentioned prime minister, I don't have the exact number, and in this case, I think, from our estimates it seems that they used 12% present value or discount rate, which, if you look at the reality, madam speaker, there is no bank that is giving you 12% on savings. Actually, here in Belize it's probably around 3% and in the more developed countries like in the US, in some instances, it's even below 1%, so I don't think that that would hold, that argument that the government is making. But what is more important that you look at in any business venture that you would get into, madam speaker, is the cash flow because, as everybody will tell you, cash flow is king. Once you have cash flow coming in in any business venture you make sure you can pay your bills, you can pay your loan and then after that you work in to your profits because then you don't have to take out money out of you pockets. Looking at the cash-flow based on the new interest rates, which is a little under 5%, that the government managed to get the bondholders to give them in, madam speaker, and you combine to the interests rates, the interest that you have been paying to the superbond- the UDP superbond 2.0 as well as the UDP superbond 3.0- madam speaker we are only seeing that there's just a savings of about $7 million dollars under the first negotiations that the prime minister and his team did, would have been paying $410 million dollars in interest. Under this new scenario, we are paying $403 million dollars in interest up to 2034, so that leaves you a savings of only $7million dollars."
Rt. Hon. Dean Barrow - Prime Minister
"You know, this is the disfiguring face of the PUP, this is the face of the PUP with all the warts and carbuncles and boils and festering sour with the puss oozing out. How can you attempt to do something like that? This super-bond is the Peoples United Party's superbond. All we have done is to restructure it twice; producing massive savings for the people of this country and, absent those restructurings, we were going to hit a wall and that would have been the end of this country. You talk about mal-pago? The superbond came about in consequence…how all of a sudden you know math and you cu talk about net present value and barrow long and pay shorter; where were you when the then prime minister and the entire government engaged in the loans that gave rise to the super-bond? Let me remind you again what does loans were; you sir were deputy prime minister at the time. $125 million US dollar Bear Stearns 10 year note issued in 2002 with the interest rate of 9.5%, and a single bullet payable in 2012. Another $100 million US dollar Bear Stearns note issued in 2003…you were in office in 2002 you were in office in 2003, you sir were the deputy prime minister. $100 million issued in 2003 a 12 year note at a 9.75% with a bullet payable in 2015; a $76 million US dollar RBTT merchant bank note issued in 2004, 10 year bonds- 9.95% bullet payable in 2014. How would you have paid back all these things at that sort of an interest rate? The bottom line is, without this restructuring the country would have found it impossible to pay that 600 and odd million coming out annually, by way of the amortizations in foreign exchange between 2019 and 2030. We just would not have been able to do it- we mih gwen to pekerek."