Yesterday we reported that the international investment rating agency Standard and Poors had sharply downgraded Belize's long term outlook - notching our standing down from stable to negative. That's like the Judas kiss for the 125 million US dollar bond that government is about to float internationally. And while government's money managers will now have to catapult through international financial circles to try and calmly convince the world that the sky is not really falling on Belize, one thing that's for sure is that the 10% interest rate originally pegged on the bond will have to be racketted up a few notches to make a high risk bond also high yield. One man that's looking closely at the latest developments is Opposition Leader Dean Barrow who today told us that the much advertised 10% rate is definitely through the door:
Hon Dean Barrow
All bets are off. Clearly what's going to happen is that if the government does succeed still in floating the bond issue, the rate of return that they will have to give bond holders on their bonds is going to be certainly in excess of the 10% they were talking about. I would think, perhaps, as high as twelve percent. It then makes a mockery of the whole premise of the bond issue, which is that they would restructure higher interest debt. I don't know that they have any debt that is much in excess of 12% because 12% is excessively high. It is proved beyond a doubt that is, that, in fact, the monies will be used, most likely be used for purposes other than debt restructuring.
Though the revised rating was posted on the internet just yesterday, government became aware of the downgrade last week, which we understand has pitched those vaunted money managers into a damage control tour of the financial capitals.