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Sovereign Debt Restructurings in Belize: Achievements and Challenges Ahead
Author:
Mr. Tamon Asonuma
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,
Gerardo Peraza
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,
Kristine Vitola
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, and
Mr. Takahiro Tsuda
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Series:
IMF Working Papers
Volume/Issue:
Volume 2014: Issue 132
Language:
English
Publication Date:
22 Jul 2014
DOI:
https://doi.org/10.5089/9781498369510.001
ISBN:
9781498369510
ISSN:
1018-5941
Pages:
28
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
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund