Said Musa, Prime Minister of Belize. - File

The Government of Belize has offered to replace outstanding commercial debt to creditors with a new issue of a 23-year U.S. dollar-denominated bond.

Four days after the announcement, the country's creditors announced acceptance of the offer.

Prime Minister Said Musa said the replacement debt would, over five years, save Belize an estimated US$301 in debt service costs, after the transaction got the Belize National Assembly's go-ahead in mid-December.

The proposed issue, which Belmopan describes as having a "step up coupon structure", will be priced initially at 4.25 per cent for the first three years of the issue.

In years four and five the coupon rate rises to 6.0 per cent and thereafter to 8.5 per cent to final maturity in year 2029.

Principal payments, or amortisations, will be made in six months, starting in 2019 to maturity.

Tenders are due no later than January 26, 2007, said a release out of Belmopan, Belize's seat of government.

Details of the offer are available from DF King & Company Inc., of New York, Belize's information agent.

The exchange offer, said a release, was preceded by four months of intensive consultations with the affected creditors.

"On its existing terms, Belize's stock of external commercial debt is visibly unsustainable," said prime minister Said Musa.

"Through this transaction, Belize will have consolidated the debt into a single new series of bonds, improved liquidity for the creditors, stretched out maturities and significantly lowered the average rate of interest on the debt."

The transaction is expected to close and the new bonds issued, during the third week of February.

Belize is being advised by Houlihan Lokey Howard and Zukin on its debt restructuring plan, announced August 2.

The Central American country, which borders the Caribbean Sea, is also hoping to secure BZ$50 million (US$35 million) of concessionary loans, equally, from the Inter-American Development Bank and Caribbean Development Bank, Belmopan said in November.

The Belize Creditor's Committee announced Friday that its members have unanimously decided to participate in Belize's debt exchange proposal. Committee members include:

AIC Finance Limited

British-American Insurance Company

Caribbean Money Market Brokers Limited

First Citizens Asset Management Limited

First Global Financial Services Limited

Guardian Asset Management

Jamaica Money Market Brokers Limited

National Commercial Bank

RBTT Merchant Bank Limited

RBTT Trust Limited

Republic Bank Limited

Sagicor Life Inc

Trinidad & Tobago Unit Trust Corporation.

bussiness@gleanerjm.com

Taken from the Financial Gleaner, Friday December 29, 2006.