The plain-spoken release says, quote, "The Government of Belize announced today that it is unable to make an August 20, 2012 coupon payment."

It quotes the Prime Minister as saying "The Step-Up Bond alone represents approximately one-half of Belize's total recorded public indebtedness... We simply cannot afford this…payment given the financing shortfalls and other challenges we face. Our hope, however, is that we can move quickly toward a sensible restructuring."

And the release doesn't say much else - but the effect of it is tremendous. It puts bondholders on notice that the Government of Belize isn't playing around - and if they want their money, they'll have to come to the bargaining table.

It also puts Belize in that position that no person or country wants to be in: that of a Malpago. But according to Economic Ambassador Mark Espat, who is heading the Debt Restructuring team, not making the payment does not put Belize in a difficult position with accessing other credit - since Belize does not seek commercial credit.

He conceded though, that a sharp rating downgrade is likely - but he says the effect of that is minimal since, again, Belize does not seek commercial credit.

Now, we should note that this is a suspension of payment, and does not represent a debt default - a default only arises 30 days after a payment is due and not made.

Depending on how things go, we may still get there but this country has been there before. Back in late 2006 and early 2007 - when the Superbond was launched the Musa Administration did suspend payment as a means of forcing existing bondholders to buy into the Superbond.

It worked - and now the Barrow administration is using more or less the same tactics to get them to buy into a Superbond 2.0. Also important to note is that the Government probably can make the 46 million dollar payment - it was budgeted and Government has not run out of money.

But the position being adopted is that the sacrifice to make the payment is too great when the step up interest payments are unsustainable.

The reactions have started to come in.

This evening, it was announced that Standard and Poors was lowering its sovereign credit rating on Belize to 'CC' from 'CCC-' with a negative outlook.

S and P warns that the rating will be further downgraded to SD - meaning selective default if Government fails to make next week's payment. As we understand it, that is not a matter of "if" but when - since it is a virtual certainty that the payment will not be made.

The PUP also sent out its reaction this evening, noting its quote, "grave concern" that the payment will not be made. The party laments that the leader of the opposition was not consulted or informed and calls for the Prime Minister to address the nation on the specific reasons for the decision.