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Western Hemisphere > Belize

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Cover IMF Working Papers
Belize's 2016-17 Sovereign Debt Restructuring - Third Time Lucky?
Mr. Tamon Asonuma
,
Mr. Michael G. Papaioannou
,
Eriko Togo
, and
Mr. Bert van Selm
This paper examines the causes, processes, and outcomes of Belize’s 2016–17 sovereign debt restructuring—its third episode in last 10 years. As was the case in the earlier two restructurings, in 2006–07 and in 2012–13, the 2016–17 debt restructuring was executed through collaborative engagement with creditors outside an IMF-supported program. While providing liquidity relief and partially addressing long-term debt sustainability concerns, the restructuring will need to be underpinned by ambitious fiscal consolidation and growth-enhancing structural reforms to secure durable gains.
Keywords:
WP; debt; Belize; restructuring experience; Sovereign Debt; Sovereign Defaults; Sovereign Debt Restructurings; Serial Debt Restructurings; restructuring process; debt sustainability concern; NPV haircut; debt portfolio risk; IMF engagement; Belize bond price; restructuring approach; U.S. dollar; face value; coupon rate; amendment terms; debt restructuring process; Debt restructuring; Bonds; Sovereign debt restructuring; Fiscal consolidation; Caribbean
Cover IMF Working Papers
Sovereign Debt Restructurings in Belize: Achievements and Challenges Ahead
Mr. Tamon Asonuma
,
Gerardo Peraza
,
Kristine Vitola
, and
Mr. Takahiro Tsuda
This paper examines the causes, processes, and outcomes of the two Belize sovereign debt restructurings in 2006–07 and in 2012–13 that occurred outside of an IMF-supported program. It finds that the motivation for the two debt restructurings differed, as the former was driven by external liquidity concerns while the latter was motivated by a substantial increase in the coupon rates and future fiscal solvency concerns. Despite differential treatment between residents and non-residents, both 2006–07 and 2012–13 debt exchanges were executed through collaborative engagement, due in part to the existence of a broad-based creditor committee and the authorities’ effective communication strategy. However, while providing temporary liquidity relief, neither of the debt restructurings properly addressed long-term debt sustainability concerns. Going forward, the success of the 2012–13 debt restructuring will still depend on the country’s ability to strengthen fiscal efforts and public debt management framework.
Keywords:
WP; bond; Belize; deficit; exchange offer; External Debt; Inter-Creditor Equity; Sovereign Debt Restructuring; debt exchange; growth performance; step-up coupon; cash flow; Belize debt restructuring; market haircut; amortizing bond; debt exchange operation; market financing; debt sustainability concern; bond exchange; Debt restructuring; Bonds; Debt service; Global