Belize Unable To Make Bond Payment in [Market-Ticker]

Posted 2012-08-20 11:44
by Karl Denninger
in International

Belize Unable To Make Bond Payment

The Belize government won't be making payments on its 2029 bond, the country's prime minister said in a statement Tuesday, setting up a potential default if the country isn't able to restructure its debt.

That was six days ago. Today, the due date, it announced that it indeed couldn't pay and wouldn't be doing so on time.

If they cannot pay by September 20th that will be a formal default.

The amount due is $23 million on $546.8 million outstanding; the total is about half of Belize's total outstanding public debt. As a point of comparison Belize has approximately $4,500 per-capita in GDP and roughly 70% of their GDP outstanding in public debt.

The interest rate on this instrument is a "dollar-step-up" type and increases to 8.5% on accrued interest this month -- a level that is rather interesting in a world with effectively-zero interest rates.

Discussion below (registration required to post)

Main Navigation

Full-Text Search & Archives

Archive Access

Blogtalk 3:30 CT Mondays

Items To Look At

Discuss The Capital Markets along with daily technical analysis with our Gold Donor program.

Where We Are, Where We're Heading (2013) - The annual 2013 Ticker

Links and Blogroll

Our policy on reciprocal links: Send us an email with your information and why you think your blog or news site would make a good addition - in most cases reciprocal link requests will be granted.

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Looking for "The Best of Market Ticker"? Check out Ticker Classics.

Visit the forum to discuss this and other investing-related topics; see the FAQ on the forum for information about Gold Donor status including access to our technical analysis video server.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

Market Ticker content may be reproduced or excerpted online provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media.

Submissions may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Leads on stories of current economic and political interest are always welcome. Our fax tip line is 850-897-9364; please include contact information with your transmission.

Bond Indebtedness:**
Bear Stearns & Co. Inc. 9.50% Notes due 2012 125,000,000
Bear Stearns & Co. Inc. 9.75% Notes due 2015 100,000,000
RBTT Merchant Bank Limited 9.95% 2014 76,051,151
Royal Merchant Bank and Finance 9.50% 2010* 25,605,618
Citicorp Merchant Bank Limited 8.95% 17,500,000
Citicorp Merchant Bank Limited 9.75% 2,571,429
Citicorp Merchant Bank Limited 9.75% 1,428,571

User Info	Belize Unable To Make Bond Payment in forum [Market-Ticker]
Jotapay Posts: 16726 Incept: 2008-08-26 Austin, Tx	I don't know how many readers have been to Belize, but they are not "living above their means" there. They are simple people basically living at subsistence level. Fuel prices are insanely high. Cars are a luxury and paying for gas to get to the next town 3 miles away is always a consideration. They generally have enough money to buy food, clothes and put a roof over their head. And that's it. I wonder how this will affect them because you can't get blood from a turnip. Last modified: 2012-08-20 11:50:36 by jotapay 2012-08-20 11:50:02 Permalink
Genesis Posts: 130723 Incept: 2007-06-26	Yep. I've been there; if you go on some sort of "planned deal" (e.g. cruise) what you see is NOT what reality is unless you venture out of the "port city" area. Belize is poor, as their GDP implies - it's not bull***. They couldn't afford ANY borrowing. I wonder who sold them those "step up" bonds? ---------- I don't care if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* Last modified: 2012-08-20 11:53:14 by genesis 2012-08-20 11:52:49 Permalink
Clay3482 Posts: 321 Incept: 2008-11-13	"I wonder who sold them those "step up" bonds?" I know you know but if I had to make a guess it would be either JP Morgan or Goldman Sachs. 2012-08-20 11:58:16 Permalink
Wearedoomed Posts: 3584 Incept: 2009-01-14 slightly red state	The other question being: Which gummint off[ici]als decided it was such a fantastic idea to ISSUE said bonds? Belize isn't exactly a shining example of the rule of law. ---------- And you, my father, there on the sad height, Curse, bless me now with your fierce tears, I pray. Do not go gentle into that good night. Rage, rage against the dying of the light. 2012-08-20 12:01:11 From PDA Permalink
Throxxofvron Posts: 10324 Incept: 2009-02-17 Hyper-Speculative Psycho-Facsistic Parabolic Blow-Off	Why take chances investing in business ventures in such an environment -specially if One can corner a very lucrative deal in Sovereign Bonds? Sounds like the same old Vulture Fund Model: load the Corporation (in this case, a nation; Belize ) up with debt and siphon off cash while investing little or nothing in the Infrastructure of the Corporation. -Load with debt, siphon off cash; hollow out the Corporation -for profit. ---------- DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides During times of universal deceit, telling the truth becomes a revolutionary act. -George Orwell Last modified: 2012-08-20 12:05:35 by throxxofvron 2012-08-20 12:04:07 Permalink
Delapaz Posts: 61 Incept: 2009-04-29	<i>Which gummint off[ici]als decided it was such a fantastic idea to ISSUE said bonds? Belize isn't exactly a shining example of the rule of law.</i> That's why they did it. Step 1. Get into power. Step 2. Get in contact with NY financiers about getting loans with sovereign credit backing. Step 2a. NY Financiers happy to skim profits on transaction and find some muppets to sell to. skim the muppets on the sell side as well. Step 3. Distribute loan proceeds to friends and family. Step 4. Oops we can't pay it back. Default! 2012-08-20 12:08:25 Permalink
Delapaz Posts: 61 Incept: 2009-04-29	Exactly Throxx. It's a Mafia-style bust-out of an entire country. Scary thing is what if Spain is exactly the same thing. Hell, what if the USA is also?! 2012-08-20 12:10:23 Permalink
Grf Posts: 1337 Incept: 2008-12-08	Every expat website I can think of has been shilling for Belize forever: "escape from America before it explodes and live in paradise!!!1one Pay us lots of money to set you up with a Belizean second passport and citizenship!!!1" And a lot of morons fell for it. They're gonna get eaten. American expats - the other other white meat. ---------- "Every time we on TF talk about God and gays, God frees a banker and gives him a bonus." --me "Your farts are interstate commerce and if they want to stick a muffler up your ass they will do it." --Boughtthefarm 2012-08-20 12:15:43 Permalink
Genesis Posts: 130723 Incept: 2007-06-26	Yep. I looked into Belize as a possible haven in the event TSHTF. What I discovered was that while they'd be happy to sell you a passport and dual citizenship for plenty of money the odds of this being a happy and peaceful existence if things went to hell here were somewhere between slim and zero, and slim had left the building an hour ago. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* Last modified: 2012-08-20 12:19:10 by genesis 2012-08-20 12:18:51 Permalink
Clay3482 Posts: 321 Incept: 2008-11-13	Yep why I am headed to Alaska - 11 more days - I cant wait 2012-08-20 12:23:23 Permalink
Jotapay Posts: 16726 Incept: 2008-08-26 Austin, Tx	There is a definite streak of criminality that runs through society there. Belize City used to be a great place to hire mercenaries when it was part of the British Empire. It still is a very seedy, Caribbean, tropical port city. Belize isn't like south Chicago, but career petty criminals out of a Dickens novel are everywhere there. Belizians are incredibly nice people, but I think Costa Rica would be a better expat location. They have a bit more egalitarian, humanitarian and evolved national psyche there. 2012-08-20 12:23:59 Permalink
Genesis Posts: 130723 Incept: 2007-06-26	There is no place that works if out for you if you wind up on the wrong end of being "food", and if "The Gringo" is seen as the cause of the collapse that's exactly what's going to happen. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2012-08-20 12:25:21 Permalink
Diploid Posts: 1 Incept: 2012-01-27 UK	As Britain's Lord Ashcroft found to his cost. (hint) start here when following the money trail. 2012-08-20 12:25:25 Permalink
Jotapay Posts: 16726 Incept: 2008-08-26 Austin, Tx	Quote: There is no place that works if out for you if you wind up on the wrong end of being "food", and if "The Gringo" is seen as the cause of the collapse that's exactly what's going to happen. I agree. If I ever were to leave Texas for any reason (and it's not something I'm actively planning), the only place I'd really consider going would be Alaska, like Clay mentioned above. 2012-08-20 12:27:33 Permalink
Smacktle Posts: 1361 Incept: 2009-01-20 Texas	California, Illinois or Spain next? ---------- The faults of the burglar are the qualities of the financier. - George Bernard Shaw 2012-08-20 12:27:59 Permalink
Ssg263 Posts: 392 Incept: 2009-01-07 NY	Belize has zero national psyche. When you arrive in the port and take a tour the biggest highlight is the "central bank," which you know is run for the best interests of the bankers and not the people. It's dirt poor and the biggest industry is probably kidnapping ransoms. Wonder how much in Belize notional CDS is out there. 2012-08-20 12:29:39 Permalink
Smacktle Posts: 1361 Incept: 2009-01-20 Texas	Alaska is too damn cold! Texas (in my area) is getting way too crowded. Anyway, wife would never leave Texas. Tried to get her to go to CO. once. ---------- The faults of the burglar are the qualities of the financier. - George Bernard Shaw Last modified: 2012-08-20 12:32:21 by smacktle 2012-08-20 12:30:18 Permalink
Clay3482 Posts: 321 Incept: 2008-11-13	LOL Smacktle - Not near Tongass Last modified: 2012-08-20 12:32:02 by clay3482 2012-08-20 12:31:19 Permalink
Genesis Posts: 130723 Incept: 2007-06-26	BTW if you want to see what people deal with now to be "reasonably safe" travel to places like Jamaica and get off the beaten track a bit. You'll see what I'm talking about. You may be willing to live out your life in a self-imposed prison. I'm not. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2012-08-20 12:31:25 Permalink
Jpg Posts: 329 Incept: 2009-03-23 MI	A month or two ago, I seem to recall hearing that Greece was projected to run out of money on August 20, which happens to be ... "Today". But, today seems to be entirely uneventful with respect to Greece. Any idea what's happening over there? 2012-08-20 12:32:30 Permalink
Jotapay Posts: 16726 Incept: 2008-08-26 Austin, Tx	Quote: When you arrive in the port and take a tour the biggest highlight is the "central bank," That's because there literally isn't **** in Belize City except for a bunch of pick pockets. The airport is kind of funny. It reminded me of airports you'd see in movies from the 1970s about a civil war in some African country. 2012-08-20 12:33:16 Permalink
Genesis Posts: 130723 Incept: 2007-06-26	Jpg, I recall that they got that tranche of money, but that was the last one and no more are promised or forthcoming. It kicked the can about a month. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2012-08-20 12:33:52 Permalink
Etz Posts: 13890 Incept: 2007-06-26 LA Online	Bond Indebtedness:** Bear Stearns & Co. Inc. 9.50% Notes due 2012 125,000,000 Bear Stearns & Co. Inc. 9.75% Notes due 2015 100,000,000 RBTT Merchant Bank Limited 9.95% 2014 76,051,151 Royal Merchant Bank and Finance 9.50% 2010* 25,605,618 Citicorp Merchant Bank Limited 8.95% 17,500,000 Citicorp Merchant Bank Limited 9.75% 2,571,429 Citicorp Merchant Bank Limited 9.75% 1,428,571 http://data.cbonds.info/emissions/9852/B.... ---------- Legal chicanery and beneficent darkness are the banker's stoutest allies - F.Pecora. 2012-08-20 12:33:57 Permalink
Smacktle Posts: 1361 Incept: 2009-01-20 Texas	Tongass 54 degrees. Anything below 60 is freezing for a Texan. http://www.weather.com/weather/right-now.... ---------- The faults of the burglar are the qualities of the financier. - George Bernard Shaw 2012-08-20 12:34:32 Permalink

Quote:

Quote: