Belize's US$565 million 'Superbond' offer will close on Friday and right now government's money managers are crossing their fingers and hoping that it goes through. But it's going right down to the wire, and 7NEWS has learned that GOB has been having a multi-million dollar dispute with the investment house that holds 70% of our Caribbean bonds. RBTT Merchant Bank Limited, the Trinidad based investment house has been arguing with government over who will come up with $3 million that is missing from a 34 Million USD bond sinking fund that RBTT manages.
7NEWS has obtained documents which show that last week Thursday, Financial Secretary Carla Barnett wrote Lyndon Guiseppi, RBTT Managing Director to, "seek a prompt and complete accounting…of that missing two to three million dollars." She noted that the bank is now saying that, "the balance in the…sinking fund is between 2 and 3 million less than what is stated in the schedules."
Barnett concludes, "the inescapable conclusion...seems to be that you are holding these funds…while apparently denying to…us that you are doing so". Dr. Barnett closes by referring to the legal implication of this and again asks Guiseppi to send an accounting. The next day Guiseppi writes and says that an asset out of the sinking fund has become, "impaired."
He warns that it is in their mutual interests to find a satisfactory way to address the situation. Mutual because government made representations in its bond offering that the full $34 million was there. So the figure had to be covered by the time of closing. With that urgency, we understand that RBTT later proposed to have government come up with one million and RBTT two million to cover the difference. Perhaps not an unreasonable request, since all in all, RBTT is losing over $10 million on the re-profiling.
But that proposal never went through, and late this evening we have received reports that RBTT and government have reached an amicable settlement, in which government won't have to pay anything, and all claims against government are removed. We don't know who will cover the difference, but the understanding is that the sinking fund will be fully restored to its $34 million value.
At this point, so close to closing, it is important for government to keep RBTT involved - because their participation in the bond offering is considered key. Government must now wait and see what the Zurich Insurance Group will do - as they have been resistant throughout.
