* Still unclear whether take-up of exchange reaches required
* Bond exchange foresees less of a haircut than first
By Jose Sanchez
BELIZE CITY, Feb 19 A committee representing
Belize bondholders said on Tuesday its members agreed to a debt
exchange on the country's $550 million superbond, after almost a
year of often heated negotiations.
Committee members agreed unanimously to swap their old U.S.
dollar bonds for new bonds with a maturity date of 2038, the
group said in a statement.
"The Committee appreciates the (Belize government's)
willingness to negotiate in good faith and to adhere to what was
in the end a fair and transparent process," said AJ Mediratta,
joint chair of the committee and co-president of Greylock
Under the deal put forward by the government, creditors
would write off 10 percent of the value of the bonds, far less
than the 45 percent haircut Belize had proposed as one of the
original restructuring options.
The maturity of the bonds will be extended by nine years to
2038. The interest rate will be set initially at 5 percent for
4.5 years and stepping up to 6.788 percent for the remaining
term, a reduction from the current 8.5 percent rate.
Glenford Ysaguirre, Belize's central bank governor, said the
committee represented holders of 66 percent of the superbond's
value. The remaining 34 percent is held by others, who must be
dealt with individually by the Belize government, he added.
The Belize government needs a 75 percent take-up rate to
trigger a collective action clause, a mechanism used to
restructure government bonds in a crisis.
"The new bond offer will stay open for three weeks. At that
time (Belize's government) will know if it was successful in
reaching the 75 percent threshold," Ysaguirre said in a
The committee and another group of 20 institutional
bondholders together represent creditors holding 62 percent of
the outstanding debt. A spokesman for the committee said it was
likely the 20 institutional investors would follow the
"The committee encourages all bondholders to consider
carefully the terms of the exchange offer in making their own
independent appraisal of the merits and risks of participating
in the exchange offer," the statement said.
The committee said participants in the exchange would
receive most favored creditor status and the principal would be
protected in the event of a future default.