LONDON, 10 September (Hfrance.fr) - Belize on Friday approached a single debt restructuring that respects the envEnvironment after two other "super bond " holders backed a plan that would see the serial defaulter pledge to protect his giant barrier reef.
The government of Belize presented a groundbreaking proposal last week proposing to buy back the $ 526.5 million bond with help from a US-based nonprofit Nature Conservation . learn more
A key part of the deal is that the government will fund a $ 23.4 million marine conservation trust that would help protect the second largest barrier coral to the world, damaged in the past by offshore oil drilling and overdevelopment.
The tender offer requires the approval of 75% of the bondholders. A trio of funds holding around 50% of the debt have already given it their blessing, and other large holders confirmed to Hfrance.fr on Friday that they would back it as well. learn more
"This is a good solution ", said Carlos de Sousa, strategist at investment firm Vontobel, which owns around 10% of the obligation. "The salvage value could have been higher but it's ok ... It is also positive from a broader market perspective that sovereigns find creative ways to address these issues.
A spokeswoman for another heavy fund, Candriam, which owns 2.2% of the bond according to EMAXX holdings data, confirmed that 'she also supportedent the plan.
Sign that more funds are in favor of the proposal This will be a boost for Belize, whose debt-to-GDP ratio remains greater than 120% despite five defaults in the past 15 years. The "superbond ", which will not mature until 2034, is itself the product of previous restructurings.
The World Wildlife Fund, which has worked with the country, estimates that more than 40% of the population lives and works along its Caribbean coast and depends on its ecosystems for their livelihood.
The services they provide - like support for commercial fishing, tourism, and erosion and storm surge protection - are worth up to $ 559 million per year. This is equivalent to more than two-fifths of Belize's GDP.
However, the debt plan is by no means a done deale.
M&G Investments, which owns 3.5% of the bond according to EMAXX data, declined to comment while the Austrian Kepler Fund, which owns around 2%, said he was undecided at the moment.
About 10% is also held by Venezuela which might not be able to vote as it is under US sanctions and the money would have to flow through the US financial system.
As part of the proposed agreement, eligible holders who remit their bonds will receive 55 cents for every dollar of principal outstanding.
The "haircut " of 45%, as the bankers call it, would seem like a huge loss to creditors, but the highest bonds have traded at in recent years after previous restructurings is around 65 cents on the dollar. Rep orteby Marc Jones; Edited by Catherine Evans
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