November 17, 2016 / 9:30 PM / 2 years ago

Belize bondholders ready talks with government

NEW YORK, Nov 17 (IFR) - Holders of Belize bonds announced this week that they had formed a committee in response to the government’s desire to open debt talks this month.

The Central American nation said earlier in the month that it would need to discuss ways to amend its outstanding 2038 bonds at a time of rising fiscal deficits.

The 2038s were issued in 2013 in what was then the country’s second restructuring in a matter of years. The bonds carry a step-up coupon that climbs from 5% to 6.767% in August 2017.

While creditors note that the restructuring has provided Belize with US$100m in debt service relief to date, the government said circumstances have changed since then.

“Belize’s economy has significantly underperformed in comparison with projections used at the time in setting the terms of the 2038 bonds,” the government said this month.

S&P lowered the country’s rating on Monday to CCC+ from B-, noting that fiscal and external balances have impaired Belize’s ability to meet its financial requirements.

“The sovereign’s debt servicing capacity has become more vulnerable to potentially worsening external, financial, and economic conditions, which could reduce its capacity and willingness to pay on its commercial bond,” S&P said.

The 2038 bonds have tumbled 16.25 points to 40.50 since Monday.

Belize has retained Citigroup Global Markets as a structuring adviser and Cleary Gottlieb Steen & Hamilton LLP as legal counsel.

Creditors have hired BroadSpan Capital LLC as financial adviser and Blitzer Consulting as special adviser. (Reporting by Paul Kilby; Additional reporting by Christopher Spink; Editing by Marc Carnegie)

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