The government of Belize had a 13 million US dollar Superbond payment due on Thursday, but, with the consent of the international bondholders it has capitalised that payment, and the next two: one in November, 2020, and the other in February of 2021. That's a total of about 27 million US dollars in deferred payments - very necessary at this time, because of the state of government's finances.
One week ago, the government announced that it rolled over these payments with the consent of 82% of the bondholders.
Seeing this, the international rating agency, Standard & Poors last week announced that it was downgrading Belize's rating to "SD" - short for Selective Default. Now any default rating is never good, and the PM rejected the terminology when we asked him about it on Friday.
Jules Vasquez
"Earlier this week, Belize's rating after reaching an agreement with the bondholders, Belize's rating was downgraded to SD, selective default. Only that word alone, no sovereign wants to hear the word, "default," linked with them. "
Rt. Hon. Dean Barrow, Prime Minister
"You know, but these people, and their jargon and their terminology, I'm not going to quarrel with them, I'm no expert, but, how is that selective default when there is an agreement, when there was a consent solicitation, and the people that you owe, the bondholders, accepted, that there was a need to capitalise the principal. No, the default would have been if we said no and we simply didn't pay. The fact is we put out the consent solicitation, we succeeded, we don't have to pay the money for now, and God knows we needed that break."
As a concession to bondholders, the terms and conditions of the bond were amended to make it so that interest payments will now be made on a quarterly basis and not semiannually.
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