Orrick assists Belize’s bond reprofiling
Orrick has represented the steering members of the committee of bondholders in addressing and consenting to Belize’s request to delay its repayments
The steering committee had been constituted to address Belize’s request to capitalise payments from August 2020-February 2021 regarding the Central American country’s New York law-governed US-dollar bonds due 2034.
Belize had announced on August 10 that the requisite approval of bondholders had been received in connection with the consent solicitation.
Belize had requested a payment delay as it struggles with the adverse economic conditions caused by the COVID-19 pandemic.
Belize’s Prime Minister Dean Barrow had said in May that the international community should look to providing some form of debt relief in the wake of the economic downturn caused by the pandemic. Belize’s economy is heavily reliant on tourism and was seriously impacted by the slump in arrivals and the closure of the country’s borders.
Barrow was quoted by local media at the time as saying “some kind of debt standstill was necessary” in anticipation of the country’s upcoming bond repayment in August of this year.
Also in May, Moody’s downgraded Belize’s credit rating from В3 to Caa1. The credit rating agency noted there is an “increased and now very high probability” that the country would either defer on interest payments or enter into a distressed debt exchange because of the economic difficulties caused by the COVID-19 pandemic.
The Orrick team advising the committee comprised Thomas Laryea, Lorraine McGowen and Nell Scott.
“A number of countries, such as Belize, have faced short-term liquidity shocks as a result of the COVID-19 pandemic,” Laryea (pictured) said.
“The approval of bondholders to Belize’s request for temporary forbearance of bond payments during this crisis period demonstrates the constructive approach of long-term investors and their preparedness to provide time in which Belize can advance its plans to diversify and grow its economy.”
