Belize Launches Debt Swap

Belize offered to swap its outstanding commercial foreign debt for new dollar bonds, Monday, following approval of the plan last week from the country’s National Assembly. The new bonds mature in 2029, with principal payments starting in 2019. The 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 step up to 6.00%, and thereafter through the maturity of the bonds the interest rate will level off at 8.50% per annum. All coupons are to be paid in cash on their respective due dates. According to Belize’s prime minister, Said Musa, the debt swap will save the country $301 million over the next five years in interest payments. Earlier this month, ratings agency Standard & Poor’s lowered Belize’s long-term foreign currency sovereign credit rating to selective default (SD) from CC/C on news of the debt swap.