It was passed by the House of Representatives on Friday and today the Senate debated the US$565 million bond and the US$25 million loan from Venezuela. The bond is being offered to the global investment community in exchange for existing bonds, which the government can't pay. It's critical if the country is to bring its debt under control. But the Senate wasn't that easily convinced. There was close voting and 7NEWS was there.
Alfonso Noble Reporting,
The 3 non-government and 3 opposition senators voted against both bills, forcing President Philip Zuniga to cast his vote to break the tie. Speaking on the issue of the US$565 million bond business sector representative Godwin Hulse lamented the lack of public information.
Senator Godwin Hulse,
"My objection is not to be an obstructionist, it is to a participant in solving our problems. But yes I am glad the Honorable Leader of Government Business said the government's side is privy to the information. They sit in a caucus and all the details are told. We are not privy, so what are you saying? You're disrespecting us or ignoring us or to hell with us? Is that we're saying? You won't give us the information because you got it already?"
Hulse says having no alternative he resorted to a Central Bank document entitled Government of Belize revised medium term projections and indicative debt restructuring scenarios. From that, he broke down how the $1 billion bond will be used.
Senator Godwin Hulse,
"Note due 2012, 9.5%, $125 million. Note due 2015, 9.75%, $100 million. Bond due 2014, $76.05 million and that is 9.95%. Bond due 2010, $13.398 million, that is also 9.5%. And there is another bond for $3.4 million due 2008, that's at 9.75% and finally one for 2013 at 8.95%. That gives us a total of $335 million. There is a BSI loan due in 2010 for $50 million; there is a BSI loan due 2015 for $65 million; there is an International Bank of Miami for $57 million; a Citicorp Merchant Bank for $2 million and a Provident Bank of Belize for $7.5 million. Those two together make $517 million and this motion is for $565 million. And there is what is called indirect private sector credit, there are bonds for $26.9 million which is the Belize Mortgage Company and those are North American bonds under the North American Securitization Program held through the Bank of New York. And there is loans on suppliers' credit, another $26 million which is International Bank of Miami, $16 million and BWSL Finance Company, $9.9 million. If we add those together that comes up to another $53 million making a total of $570 million which I am assuming are the ones we are restructuring. I said assume because I got to do that from this document because I had absolutely no time to call the Financial Secretary, no time to research the figures on a Sunday, and so it is inaccurate, unfair, and disingenuous to suggest to that must do our homework and we have all the data available to us. That is the best I can do."
And in the best that he could do, he could not match any of three scenarios contained in the document to the present super bond offering.
Senator Godwin Hulse,
"That does not match the resolution so I take it that one was not accepted. Scenario two does not match the resolution in front of us so I take it scenario two was not adopted. Madam President scenario three does not match the resolution in front of us. So which scenario did we adopt and when could I find that out and how dare you come and say to us to say yes. The World Bank worked on the thing, you worked with them, they put scenarios, they put suggestions, and none matched the resolution in front of us. Which bond is this? Which one of the proposals were taken, was this something subsequent to what was on the web? It this something subsequent to what was published? Is this something subsequent to what was out there? You trying to confuse us? We have contradicting figures and with all my simple basic common sense, could we sit down with somebody who knows, who could say to us, why is this so, why the changes, why have we gone this way, have we made this proposal to investors and they said no, did we have to beef it up, is this the best we can do? I am not here to say no. I am not here to say stop the country. I am not here to say for us to go to help and we have all the mess, all of that is being spoken to and we have to make the effort to correct from our people and those who took and ran away with our money we have to get it back. I am not saying the Finance Ministry is wrong and I am not saying that they don't have reasons for doing this, I'm saying you come to this Senate with a proposal and maybe it has been discussed with my colleagues in the government side in caucus as Senator Bradley said and maybe when he gets up to sum up he will tell me why changes. I look forward to hearing why the changes but don't put that on my back because I really don't want to carry that beautiful howler monkey on my back."
And while Hulse says he's not ready to carry that monkey on his back he suggests that those who will be carrying, not a monkey but additional taxation are the Belizean public who will be paying for $956 million worth of interest on the 22 year Super-Bond.
Senator Godwin Hulse,
"Under this new possibility, years one to three will cost us US$42 million in interest. It says years four to six will be at 3.5%. Our offering here says years four to five will be at six percent. That will cost us twenty eight million dollars more which makes a total of seventy million dollars between year one and year five with the new bond we are requesting and that is U.S. dollars. And then it says seven percent thereafter. Our proposal here says eight point five percent from year six to twenty two which will be one hundred and forty four million dollars more in interest. Add up the total Madam President, we are looking, the scenario before us is two hundred and fourteen million U.S. dollars more in interest. What that means is that we will have paid five hundred and sixty five million dollars U.S. in year 2022 and from year one to year twenty two, nine hundred and fifty six million U.S. dollars in interest. That is the price we will be paying to keeping the bonds so long. That is the price, anybody could check the figures. I am not saying this is a not a good deal, I am not saying that we shouldn't do it, we shouldn't restructure our loan we should find a way out of it, I am saying that all the scenarios that were presented to us, you come with a fourth and you don't give me the data behind the fourth and the three were the World Bank and you in collaboration, you put it on the website, you said this and you said that, and you come with a fourth."
In the end with a majority split the Senate approved both the loan and the bond offering.
