BELIZE CITY, March 8 Belize's government said on
Friday it had met the required threshold needed to complete a
debt exchange on the country's $550 million superbond, allowing
the tiny Central American nation to restructure its debt.
In a statement, the government said that holders of 86.17
percent of Belize's U.S. dollar bonds due in 2029 had agreed to
swap them for new bonds due in 2038.
The Belize government needed a 75 percent take-up rate to
trigger a collective action clause, a mechanism used to
restructure government bonds in a crisis.
"The results of the tender process that ended today means
that such an exchange of the entirety of the 2029 Bonds is
expected to take place at a closing of the transaction later
this month," the Belize government said in the statement.
Under the terms agreed, creditors will write off 10 percent
of the value of the bonds, well below the 45 percent Belize had
proposed as one of the original restructuring options.
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.
A committee representing Belize bondholders had previously
said that participants in the exchange would receive most
favored creditor status and the principal would be protected in
the event of a future default.