Municipal paper, or municipal bonds - up until a decade or so ago, no one had heard of such a thing. But now - at least with institutional investors - it's giving the banks a run for their money.
And the Belize City Council has floated more of these bonds than anyone. And with enabling legislation now in place, the council hosted an Investment Forum to boast about the virtues and the value of municipal bonds. Today at the Biltmore, they presented insights and statistics on all they've managed to achieve with the help of municipal securities. Jomarie Lanza reports.
The Belize City Council's public investment forum for 2025 presented the council's achievements and vision over the past year, exploring how municipal securities continue to shape the future of the city's growth and development. Mayor Bernard Wagner explained how this new approach of municipal securities has ensured continuous progress and expansion within the city.
Bernard Wagner, Mayor of Belize City
"It's about selling the municipal securities we are looking for investors it could be institutional investors pension fund insurance companies, corporations, banks but also the retail investor who wants a greater return on his or her investment and so as a city grows sometimes you don't have adequate funding to really drive development in the city and so we wanted to start 2025 by engaging the investor and selling our product which is the municipal paper, note or bond."
"The municipal securities is not a novel idea it has been out there for years the city of New York floats bonds each and every day. As a matter of fact their bonds when I last checked for the city of New York they had a ceiling of close to 132 Billon dollars and so we are less modest of course but the good thing about this is that we know have the structure in place the legislation so we have the oversight body, which is the FSC which really regulates institutions who seek to do securities."
He says that a city cannot rely strictly on taxes and revenue collection. Those traditional revenue streams are not enough to fund large projects and construct new streets.
Bernard Wagner, Mayor of Belize City
"Well the taxes is used for your day-to-day operation but if you are engaging in capital projects, huge projects, street infrastructure parks, and playgrounds expansion of your e-mobility project you need significant capital and you will never be able to get those on a day-to-day basis of property taxes, trade license, liquor, license or traffic fees. So you have to be able to access the market in the Belize market. The last time we checked there was close to 700 million in the banking system that is sitting in the banking sector and those funds can be utilized to drive development within a city especially like Belize city which is a growing city. We have over 730 odd streets people want to walk on decent streets people want to drive on decent streets but how can we as a municipality able to drive that development the only way we can do it is through seeking capital from the investors."
We asked him about the yield for current securities and how it compares to commercial banks
Bernard Wagner, Mayor of Belize City
"Well our securities vary the rate varies but on an average basis we are paying like 4.5 percent which is much better than the banks would pay your or a financial institution would pay you on a deposit."
"By legislation the council cannot pay more than 20% of its recurrent revenue on an average for the past 3 years so even with this new offering that we are proposing it will be less than 3 million in interest payments annually."
"Getting the sort of capital that you want you will be able to not only rehabilitate streets but build new streets and everywhere the city is growing you see it in the Belama phase 5 you see it in the Jane Usher area all across this city streets, people want streets people want decent streets and we as a municipality have to be proactive and that is why we had this investment forum."
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