$450 million, almost half a billion dollars: it may be the mother of all bond issues - the "capo di tutti capi" - and on Friday in the National Assembly government will push it through all three readings.
According to a government release the bond is to refinance DFC's and government debt and it is expected to save $125 million over the next 8 years. And if you don't believe in government's wisdom on bond issues, GOB points to the IMF, which advised Belize to refinance its debt.
Analysts we spoke to note that the debt does need to be refinanced as a matter of urgency because government took on a lot of expensive debt and now finds it's current debt service burden unmanageable.
But, there are concerns that when this bond becomes due in 15 years, whoever's in government then will have to pay US $225 million, in "one lick" on one sunny day in April of 2019. Government says it's developing a sinking fund for that due date but we were unable to find any hard figures on where those savings currently stand. According to our records, this is government's third major bond offering in two years amounting to almost $1 billion Belize all for a seemingly endless cycle of debt refinancing.
We note that the fact that DFC's debt will be bundled into this offering even as government is trying to sell off the DFC meaning that the poorest performing debts will be included in this offering making the DFC more attractive and leaving taxpayers with the burden.
A past bond offering included the $30 million Novelo's debt and $1.6 million dollars loaned to a disc jockey. Government has not disclosed what percentage yield the bond will receive; past bonds have fetched close to 10%.