The Ministry of Finance of Belize launched a consent solicitation on July 17 to the holders of $526 million of bonds, seeking to allow for the capitalization of the next three quarterly interest payments.
The capitalization of interest payments will allow the government to allocate funds to address health and economic crises resulting from the outbreak of the COVID-19 pandemic, which have acutely affected Belize’s economy and financial condition. Since the start of 2020, Belize’s tourism industry—which in recent years has accounted for approximately 60 percent of its foreign exchange earnings and 40 percent of its overall economy, and has been a critical factor in Belize’s economic growth—has suffered due to the rapid deterioration of worldwide economic conditions and lockdown measures imposed worldwide.
The bonds represent substantially all of Belize’s indebtedness to foreign investors. Belize is pursuing other relief measures under its bilateral and multilateral financing arrangements as well. On July 23, a bondholder committee representing a substantial portion of holders of the bonds issued a press release expressing its support of the consent solicitation.
The S&C team advising the Ministry of Finance is led by Jim Bromley, co-head of our
Global Restructuring practice, and Werner Ahlers,
Latin America practice partner. Sergio Galvis and Bob Risoleo provided advice on strategic and U.S. security law matters. Jeff Hochberg and Saul Brander advised on tax matters.
Previously, Jim represented the Central Bank of Belize in the insolvency of the Atlantic International Bank Limited, the largest offshore bank in Belize, and related fraud litigation by the Federal Trade Commission.