It was just eight days ago that we told reported on Standard and Poors’ lowering of Belize’s long-term foreign and local currency sovereign credit ratings from B minus to CCC plus. We all know that anything graded that falls from B to C is bad news, but this is triple C plus which is more bad news because in Standard and Poor’s rating anything that hits that low is considered junk bonds. It now seems that CCC plus is not as low as it gets and all indications are that we’re getting there. Yesterday, Standard and Poors lowered Belize’s sovereign credit further into junk status, from CCC plus where it was for a week, to CC. This further slippage was due to Government of Belize’s official announcement that it was seeking to restructure the Superbond for a third time. In that announcement, the Government indicated that its prognosis indicates that it wouldn’t be able to meet their debt obligations as stipulated in the Superbond terms.
The holders of those bonds have reacted with some concern, indicating that no country has had to negotiate the same bonds three times.
Standard and Poors itself has noted that the country faces numerous challenges including fiscal and external imbalances, limited access to external funding, reduced foreign exchange reserves and the loss of correspondent banking relationships.