S&P downgrades Belize, bonds

S&P said it lowered its long-term foreign currency rating on Belize to selective default (SD) from CC and removed the rating from CreditWatch with negative implications, where it was placed on Feb. 21.

In addition, the agency downgraded the short-term foreign currency rating to D from C.

At the same time, S&P affirmed the CC long-term local currency rating and the C short-term local currency rating. It revised the outlook on the long-term local currency rating to stable from negative and affirmed the transfer and convertibility assessment at CC.

Finally, S&P cut the rating on the bonds included in the sovereign's debt exchange to D from CC (foreign currency bonds due in 2038).

S&P said the actions follow Belize's March 15 announcement that holders of more than 87% of the dollar-denominated bonds due in 2038 have consented to amendments to the terms of the bonds, which will alter the interest rate and amortization schedule. The collective action clauses relating to the U.S. dollar bonds specify the voting threshold at 75% of bondholders. Above this threshold, the proposed amendments become binding to all holders of such bonds.

According to the proposed amendments, the bonds will have a final maturity date of Feb. 20, 2034, instead of Feb. 20, 2038.

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