7 News Belize

Not Ready for The World?: Superbond 2.0 Gets Rough Reception
posted (August 9, 2012)
Last night we told you about the government's launching of what are called "Indicative Restructuring Scenarios." Basically, they are proposals for a Superbond 2.0 - with farm more agreeable terms than the present Superbond.

It would save the government of Belize many, many millions of dollars - but represent significant losses for bondholders.

Well, today we got a feel for what the reception on the market is like - and it's not good.

A commentary from a Scotiabank International Analyst named Joe Kogan calls it, quote, the "worst restructuring terms."

He says, quote, "this proposal (is) one of the worst restructurings for bondholders in recent Emerging Markets history."

Kogan - who had been moderate in previous analyses of the Superbond difficulties - concludes that quote, "the government's strategy is puzzling. On one hand, they are going through the motions in consulting with bondholders and making their case for a restructuring. On the other hand, today's lowball offer will undoubtedly anger all bondholders, who would lose tremendously if they participated in such an exchange."

He closes by suggesting that there is room for government and bondholders to come up with a more creative solution.

As we understand it, Government's debt restructuring team anticipated this reaction - and has been engaging with bondholders.

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