Bondholders accept new superbond terms

The Coordinating Committee of Belize Bondholders announced Tuesday that its members, who represents more than 60 percent of the bondholders, will accept the Government of Belize’s new “superbond” terms.

The committee, via its press release, also encouraged all remaining bondholders “to consider carefully the terms of the exchange offer in making their own independent appraisal of the merits and risks of participating in the exchange offer.”

A.J. Mediratta, co-president of Greylock Capital Management and co-chair of the committee, is quoted in the release saying, “The Committee appreciates the GOB’s willingness to negotiate in good faith and to adhere to what was in the end a fair and transparent process.”

The committee’s announcement came one week after Prime Minister Dean Barrow had tabled the new terms at the House of Representatives last Tuesday, and only a few days after the Friday, February 15th issuance of the exchange offers.

The coordinating committee and the ad hoc committee—which consists of 20 institutions that have agreed to cooperate with the coordinating committee’s recommendation—represent US$338 million of the US$548 million bond.

GOB, however, still needs to acquire the support of 75 percent of the bondholders in order to activate the Collective Action Clause that would force the remaining 25 percent of bondholders to also accept the new terms.

As Barrow explained to the House of Representatives last week, the new bond offers a “10 percent principal haircut…so immediately BZ$108 million is to be written off the current super bond indebtedness.”

He added that the reductions to the 8.5 percent coupon (interest) rates will present debt service reductions of BZ$22million in 2012, BZ$66 million in 2013, BZ$236 million during the first 5-year period, and BZ$494 million during the 10-year period 2013 to 2022.

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