(ADDS comment from bondholders committee)
By Paul Kilby
NEW YORK, Jan 13 (IFR) - Belize has launched a consent
solicitation in an effort to amend the amortization schedule and
lower coupon payments on its 2038 bond.
The Central American country wants to cut the interest rate
on its so-called superbond to 4% per annum starting February 20
The bond currently pays 5% annually, with a step up to
6.767% starting August 20.
It also wants to adjust timing of principal payments from
the current 38 semi-annual installments starting in 2019 to
three equal amortizations on February 20 of 2036, 2037 and 2038.
"The two amendments ... are, we believe, the mildest
adjustments to the terms of the bonds that will still achieve
the objective of putting the bonds on a fully sustainable
basis," Belize Finance Secretary Joseph Waight.
In return, the sovereign is offering holders a consent fee
of 0.25% of the face value. The consent solicitation expires on
January 26. Citigroup is acting as agent on the transaction.
The announcement comes just days after the trustee of the
bond officially recognized a bondholder committee to hold talks
with the government on Belize's third restructuring in a decade.
"The committee will study (the proposal) as expeditiously as
possible and make a recommendation to the bondholders," Charles
Blitzer, an advisor to the committeee, told IFR on Friday.
Funds including Greylock Capital Management and Grantham
Mayo van Otterloo joined forces to form the group, which was
assembled last month to represent bondholders.
Trustee Bank of New York Mellon formally approved the
committee to negotiate with Belize, which says that its US$530m
bond, issued in 2013, is unsustainable.
The bond, which comes due in 2038, came out of the
restructuring of a previous note that itself was the
consolidation of other debt in a 2007 restructuring.
(Reporting by Paul Kilby; Additional reporting by Davide
Scigliuzzo; Editing by Marc Carnegie)