CJ Politics

Moody’s Upgrades Belize Credit Rating, Warns of “Debt Overhang”

By: Caribbean Journal Staff - April 15, 2013 - 8:25 pm

Above: Parliament in Belmopan

By the Caribbean Journal staff

New York-based Moody’s has upgraded the credit rating on Belize’s government bonds, the firm announced Monday.

The rating has been lifted to Caa2 from Ca, with a “stable” outlook.

The move comes after Belize restructured its $547 million “Superbond,” which is due in 2029. That included what became Belize’s second default in the last seven years.

But while Moody’s said the restructuring would provide “temporary liquidity relief,” it is “insufficient in addressing Belize’s debt overhang.”

Looking forward, a number of structural factors will keep the government’s rating in the Caa space for the next two to four years, the firm said, pointing to Belize’s track record of two defaults in seven years, something that “signals a weak institutional willingness and ability to service external debt.”

The country’s government debt remains at around 70 percent of GDP, which, coupled with “limited fiscal and foreign exchange buffers impairs the outlook for economic growth post-restructuring.”

That leaves Belize “vulnerable to shocks that could lead to an abrupt decrease in government creditworthiness.”

“There is a potential for an escalation of credit risks in the coming years. In our opinion, the government will find it progressively more difficult to maintain fiscal discipline as demand ratchets up for increased public sector wage hikes, social transfers, and capital investment,” the firm said. “Also, the debt service on the US dollar bond will escalate due to an increase in the coupon rate in 2017 and amortization payments that are set to start in 2019. Faced with rising financing needs, a pre-emptive debt restructuring could once again become an attractive alternative for policymakers, particularly in 2017, the year the next general election is set to take place.”

Popular Posts antigua long bay

25 Perfect Caribbean Beaches to Add to Your Summer Bucket List

There’s nothing like a Caribbean beach in summer. The crowds thin out, the winds relax, and the islands start breathing in a different way. The beaches you thought you knew feel new again— stretches of sand once packed with winter […]


Royal Caribbean’s New Cruise Ship Has a Rooftop Bar, a Waterpark and the Largest Pool at Sea

star of the seas

You step into a glass dome floating high above the ocean. To your right, divers plunge from platforms. Above, aerialists twist through light. Somewhere behind you, a DJ is spinning beside a suspended infinity pool. This isn’t a dream — […]


The 15 Best Hotels in Trinidad and Tobago, From Hidden Eco-Retreats to Luxury Towers

trinidad and tobago hotels where to stay

From Port of Spain to Tobago’s quiet coasts, these are the places to check in now No two Caribbean islands are quite like Trinidad and Tobago—and no two hotels here feel the same. This is a destination of contrast: Carnival […]


Related Posts best caribbean restaurants

The 50 Best Restaurants in the Caribbean - 2025

No region in the world has a more diverse or dynamic culinary continuum than the Caribbean. Just about every cuisine on earth is represented, often in wonderfully, intoxicatingly fused expressions. Across the breadth of the Caribbean Basin, you will find […]


Hopkins, Belize Is the Best Caribbean Beach Town You’ve Never Heard of 

beach town belize

You hear it in the late afternoon. It starts as a walking beat: one, two, one two. Then it becomes something else, something more powerful. One-two-three one. A percussive pounding, a series of ritual punches that cut through the sea […]


The Caribbean’s Best Hot Sauce Comes from Belize

caribbean hot sauce best

Beware. No Wimps Allowed. Belizean Heat. These are the monikers that adorn some of the hottest hot sauces you will ever try. But they’re not the hottest. That would be Red Hornet, a sauce so hot even the official tasters […]