Last week government said it can restructure and manage its debt for this year at least but the international rating agency Standard and Poor's says it is in imminent danger of default. Well, today Standard and Poor's gave the unequivocal thumbs down to government's planned restructuring of its foreign debt with another downgrade. Last Friday GOB announced that under its program of adjustment, they will try to re-structure Belize's oppressive foreign debt.
Well that will be much more difficult now because today S&P downgraded Belize's long term foreign currency rating from 'CCC' to 'CCC-' that means imminent danger of sovereign default by the reckoning of the S&P analysts. The thumbs down doesn't bode well for a government scrambling for international financial credibility because it was as a direct result of government's announcement on Friday.
An S&P analyst says whatever new repayment terms government comes up with, will probably be unfavorable to their lenders and will still in effect constitute a default. In fact S&P says that the debt restructuring program, "emphasizes the government's decreased willingness and ability to meet its debt obligations." According to S&P the way out is for gob to stick to its fiscal adjustment plan and brace Belizeans for the hard times to come. You can see the entire release here.
