The international investor community has expressed grave concern about the state of Belize's finances. That concern was evident today in a release from Standard and Poor's, the international investor service. For the second time in ten days and the third time in 6 weeks, S&P has lowered Belize's credit ratings by one notch across the board. Most notably, the short term local currency credit rating has gone from ‘B’ to ‘C.’ This means that Belize's creditworthiness is considered very poor and the country is considered as having a high risk of default on its debt.
The downgrades come after government announced that it was abandoning the US$225 million bond offering (See US$225 million Bond Sinks).
According to Standard and Poor's analyst Olga Kalinina, "Government will now be challenged...to meet its amortization needs...an increasingly complex challenge given its deteriorating credit profile and the country's unsettled political situation." The political unrest does factor heavily into the report, as it goes on to say "the worsening of the political situation will also impair Belize's creditworthiness." But politics only plays a small role; the fact is Belize needs to find tens of millions in US dollars to meet its US$42 million in external commitments before the end of the year. $23.3 million of that is due to the International Bank of Miami.
The report concludes that, "the country's financing needs of more than us 200 million dollars are dangerously high compared with the available official reserves of just above US$70 million."
Read the full S&P Release Yourself by Clicking Here.