The Central American sovereign pushed the response date from February 10 to February 24, the third time it has extended the deadline.
The offer was initially launched on January 12 with a deadline of January 26 as the government aimed to complete its restructuring ahead of a coupon payment due on February 20. The deadline was then pushed to February 3, then February 10, and now February 24 — taking past the coupon payment date and raising questions as to whether Belize will make the payment.
Belize’s offer, which it insists comprises the “mildest” possible adjustments the borrower could make, does not reduce the principal amount. It does, however, reduce the interest rate from 5% (and scheduled to increase to 6.767% in August 2017) to 4%.
More importantly for bondholders, it proposes a major change to the amortisation schedule: instead of beginning semi-annual principal payments in August 2019, the government is proposing three equal instalments in February 2036, 2037 and 2038.
But a group of bondholders immediately rejected the terms outright.
Stuart Culverhouse, head of research at Exotix, told GlobalCapital at the time that the bondholders didn’t like either the terms or the process, as the government had not come to any agreement with the bondholder committee ahead of the consent solicitation.
Although financial secretary Joseph Waight insists that talks are continuing, unless bondholders — some of whom went through a painful restructuring with the same government four years ago — have a sudden change of heart, the stalemate looks set to run past Belize’s next coupon date.