When Belize’s 225 million us dollar bond was derailed, former finance minister Ralph Fonseca laid much of the blame at the door of Bear stearns, the international financial consultancy that had basically warned institutional investors to stay clear of the bond offering. But according to today's Belize times, Bears Sterns has changed its tune after a visit to Belize in early September.
DFC general manger Troy Gabb quotes a new Bear Stearns report, which shows their analysts decidedly more at ease with Belize’s financial picture.
Well, we know what may account for the sudden change of heart; it looks like Bears Sterns is back on the Belize gravy train. The background is that on the most recent bond offering, Belize had abandoned bear sterns, which floated two prior bonds for Belize, and went with its competitor Solomon Smith Barney. Well now that the Solomon Smith Barney deal collapsed, 7 news has obtained a document which shows that Bear Stearns is back in the money, so to speak.
On September the 16th.,Bear Stearns managing director AJ Mediratta wrote to the prime minister proposing a financing package of between 50 million and 100 million us dollars. It's called a "collateralized package with a sovereign guarantee" and, as proposed, it would see government paying roughly 11% over 10 years, hardly concessionary terms. What's more, according to the confidential proposal, the principal amount is a full 30% more than the net proceeds which government would get. Again, it's just a proposal, but it's one that minister of state in the ministry of finance Jose Coye today told us he knows nothing about.
He says that from his informed view, right now government doesn’t need more debt for refinancing debt right now. He said that cabinet's finance committee has just finished its review of the DFC and is satisfied that if it can get 40 million dollars in refinancing support from the International Bank of Miami, that would be enough to stabilize the country's finances. But it seems that may not be the view of the prime minister and minister of finance, who according to this Bear Stearns letter is looking at other options.