To quote Marquez, it was the "Chronicle of a death foretold" and tonight that death is confirmed, government will not float the US$225 million bond it proposed in May. According to an official release, government's contract with Morgan Stanley as lead manager expired on August 17th., which at best a convenient if not credible excuse.
We say not credible because on August 18th in his Cabinet restructuring speech the Prime Minister announced that Minister Fonseca would remain in charge of the bond indicating then that, though troubled, it was very much a going concern. What is more likely is that the bond has had to be nixed because of successive downgrades in the country's bond ratings by leading investor information service, Standard and Poor's which lowered Belize's ratings twice in three weeks following Moody's which made a double downgrade in late July. And while the bond won't float, Belize still has to pay a considerable fee to the lead manager, Morgan Stanley. That figure plus legal fees is expected to be close to US$3 million.
Government's statement says it now intends to refinance its debts with the corresponding banks. We assume those pleadings will be held with the Royal Merchant Bank of Trinidad and Tobago and the International Bank of Miami with which the government has significant debts that are imminently due. Much of those debts are for the insolvent DFC which owes social security $43 million and hasn't paid for 13 months.
It's quite a mess, and since the Cabinet shakeup of 12 days ago, who's going to be in charge of all cleaning it up? Well, perhaps the most telling things about today's release is that it came from the Ministry of Finance and Home Affairs Ralph Fonseca's Ministry. That's right, the government's website posted the release from that ministry which we thought didn't even exist anymore. That tells us that for all its private bluster and public hardballing, the G7 got properly played, because from all outward appearances, "Ralph still run tings" in Finance.