Seven days have passed since the February 20th deadline for the Government of Belize to make payment of $26m due to the Superbond debt. While the Government is now relying on a 30-day grace period to allow for time to strike a renegotiation deal, the economy keeps taking hits, giving the Belize’s negotiating team less room to make demands.
The latest news on the economy comes from credit rating service Standard and Poors, who on February 21st further downgraded Belize’s foreign currency sovereign credit rating from ‘CC’ to negative watch. This occurred the day after Belize faulted on its scheduled payment.
S&P has indicated that the reason for its downgrade is that there is at least a one-in-two likelihood that we will lower the rating on Belize to 'SD' within 90 days.
If the Government fails to pay within the 30-day period, there will be a further downgrade to SD or Selected Default.
Meanwhile, the Government’s proposed terms in a consent solicitation submitted for consideration will be expiring tomorrow. Prime Minister Dean Barrow has expressed confidence that there has been sufficient compromise to convince bondholders to agree to new terms of payment for the Superbond.