Belize government looks to exchange 2029 step-up bonds for new bonds

By Caroline Salls

Pittsburgh, Feb. 12 - The Government of Belize will seek the approval of the Belizean National Assembly for the financial terms of an offer to exchange its dollar step-up bonds due 2029 for new dollar bonds, according to a news release.

If approved by the assembly, the exchange offer will be formally launched later this month and is expected to close in late March.

Belize said the new bonds will mature in 2038, with equal semiannual principal payments beginning in August 2019.

The new bonds will bear interest at 5% from March 20 through Aug. 19, 2017. After that, the rate will increase to 6.767%.

Under the proposed exchange offer, creditors will receive new bonds with a face value equal to the sum of 90% of their holdings of the 2029 bonds and past due interest through March 19.

Belize said capitalized interest through March 19 will be calculated at an annual interest rate of 8½%. Total capitalized interest will amount to 7.083% of the principal amount of the 2029 bonds.

According to the release, $1.7 million is expected to be deducted from the first coupon payment to cover out-of-pocket expenses incurred by the creditor committee that negotiated the terms of the exchange offer and to fund an account covering contingent trustee expenses.

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