Thursday, September 6, 2012

Belize Gains Leverage in Default Talks as Borrowing Not Seen


Thu., September 6, 2012
Belize’s creditors are betting the Central American country will improve its bond restructuring offer in order to maintain access to global debt markets. The government says it doesn’t need them, Bloomberg Businessweek reported. Belize’s $1.4 billion economy, which expanded 2 percent in 2011, can go without more borrowing on international credit markets, Prime Minister Dean Barrow said in an Aug. 22 press conference. The country didn’t sell global bonds before 1998 and hasn’t returned to them since a 2007 restructuring. Barrow’s government, which missed a $23 million coupon payment on Aug. 20, is seeking to reach an accord with creditors before a mission from the International Monetary Fund comes to the country in October as part of an annual review of the economy, according to Mark Espat, who heads the country’s bond restructuring committee. Belize’s ability to survive without global market access may give it an advantage in talks, said Stuart Culverhouse, chief economist at Exotix Ltd. While both creditors and the Belize officials have expressed the need for “good faith” negotiations, a group representing Belize’s investors says the government hasn’t provided sufficient justification for its default and subsequent restructuring offers, which value the bonds at about 20 cents. 

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