UPDATE 1-Belize lays out 'superbond' restructuring options // Belize geht wohl die Luft aus und überlegt die A0LNPG zu restrukturieren …

UPDATE 1-Belize lays out 'superbond' restructuring options

Fri Aug 10, 2012 4:41am IST

By Mike McDonald
    GUATEMALA CITY, Aug 9 (Reuters) - Investors in Belize's
so-called superbonds will be asked to take a haircut of up to 45
percent on the investments under restructuring options put
forward by the country's government this week.
    Prime Minister Dean Barrow has said the small Central
American country cannot afford to service the $550 million
dollar bond, which started with a coupon payment
of 4.25 percent but steps up this year to 8.5 percent.
    Restructuring options include cutting the principal to be
repaid by 45 percent and extending the maturity date to 2042
from the current 2029, according to a document on the Belize
central bank's website, dated Aug. 8. 
    The interest rate on the bond, which accounts for about half
Belize's government debt, would be cut to either a flat 3.5
percent throughout the term of the loan or step up from 1
percent in 2019 to 4 percent by 2042.
    A third option would involve extending the term to 2062, no
discount on the principal, a 15-year grace period on principal
payments and a flat interest rate of 2 percent.
    Godwin Hulse, a senior member of the government's
restructuring team, said the haircut was an option given the
bonds were trading below 50 cents but no final decision had been
taken.
    "We've just posted those scenarios on the website and are
reviewing some of the responses that are coming in," he said in
a telephone interview. 
    Exotix economist Stuart Culverhouse said the proposal was
even more negative for bondholders than expected. 
    "We retain our 'Sell' recommendation on Belize's super
bond," he said in a research note. 
    The yield on the bond jumped 3.5 percentage points after the
announcement to 23.4 percent, according to Reuters pricing.
    Investors are due to receive a $25 million interest payment
on the bond on Aug. 20 and Belize has said it has budgeted to
make it.
    Asked to confirm the August payment, Hulse said: "We are
going (one) step at a time ... we are having a (meeting) next
week where we will discuss all the details. Next week we will
have responses from bondholders and institutions."