S&P Revises Down Belize To Default On Debt Swap Offer

Following the announcement Wednesday by Belize that it will offer to exchange most categories of its foreign commercial debt for new dollar bonds, ratings agency Standard & Poor’s Thursday lowered its long-term foreign currency sovereign credit rating on the country, this time to selective default (SD) from CC/C. Last month the agency downgraded the rating from CCC- to CC, just two notches above a default rating. The agency said it had also revised its long-term foreign currency ratings on the bonds in the debt swap proposal to D, but affirmed its CCC+/C local currency sovereign credit rating on Belize. The government of Belize Wednesday said it would seek approval of the National Assembly for a debt swap offer which, if approved, would be launched later this month. The Government is proposing to issue New Bonds that will mature in 2029, with principal payments commencing in 2019. According to a government press release: “The New Bonds will bear interest in the first three years after issuance at a fixed per annum rate of 4.25%. In years four to five, the rate will increase to 6.00%, and thereafter through the maturity of the New Bonds the interest rate will level off at 8.50% per annum. All coupons will be paid in cash on their respective due dates.”