S&P cuts Belize foreign currency rating to SD after bond plan

Aug 12 (Reuters) – Credit rating agency S&P Global Ratings said on Wednesday it has downgraded Belize’s foreign currency ratings to SD from CC/C after the Central American country announced details of a debt restructuring plan this week.

Belize in July proposed to creditors that it would capitalize some scheduled payments on its $526 million Eurobond maturing in 2034 because it could not afford to meet them as it battled with the effects of the coronavirus pandemic.

Belize’s government said on Monday holders representing 82% of the outstanding debt had agreed to amendments on the terms of the bonds set out in a so-called consent solicitation statement.

Under the agreement, the interest payments due on Aug. 20, Nov. 20, and Feb. 20, 2021 will be capitalized. Obligations to meet interest payments due after Feb. 20, 2021 will not be affected by the planned amendment, Belize said.

The government said it expected conditions precedent to the effectiveness of the amendments to be met on or about Aug. 17.

Due to the amendments, Belize’s government will be required to hold a quarterly conference call to update investors on economic and financial developments in the country.

According to S&P, an ‘SD’ rating is assigned when the agency believes a borrower has “selectively defaulted” on a specific issue or class of obligations but will keep meeting obligations on other issues or classes of obligations in a timely fashion. (Reporting by Mexico City Newsroom; editing by Richard Pullin)

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