Two weeks ago, Belize City Mayor Bernard Wagner wasn't forthcoming with the details about the council’s new municipal bond. But today at their 8th Month Financial Report press conference, the mayor officially announced the bond and discussed the structure. It is a $6 million bond and he says he already has a $5.6 million dollar commitment from investors. Wagner calls this bond – genius.
Bernard Wagner - Mayor of Belize City
"This is a genius paper, this is not the typical salary assignment paper. The municipal paper, the purpose, to smooth out short cash flow and reduce our financing charges. We will also fund a one year interest service reserve account, the amount we are subscribing to is 6 million in denomination of 5 thousand. The term, 91, 182 days and 365 days right, very unique, genius type paper. We have without even going public over 5.6 million already committed from our institutional investors and you know why those institutional investors have already committed without the paper even going public is because they have confidence in this council to lead this city. For this bond we have a standby, out of those funds we will put a standby overdraft of 1 million to meet interest expenses but what I want to drive home with bond it's a revolving bond, it's something like an overdraft. So say for instance you as a bond holder subscribe to us for 100 thousand say for one year. When one year comes, we will have your interest available to pay you. If you want to roll it over, you have that option but the point here it's a revolving bond where the bond holder or the financial institution has the ability to continuously earn interest."
Wagner says he has sent the bond proposal to the Prime Minister to sign unto and he is awaiting a response. The previous UDP city council floated an 8.5 million dollar bond to pave streets and used the government subvention to go into a sinking fund to pay it off.
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