Superbond Deconstructed

"Superbond" - the word has morphed into everyday vernacular. But what is it really? The experts would say it is a neologism - a newly coined word or expression invented right here at 7news.

That's right, you can check the archives: the term was first coined on the newscast of December 6, 2006. We used it to describe one single set of new bonds valued at half a billion US dollars that wrapped up all the bonds preceding it.

That it has now passed into common usage - and appears in caps in the Wall Street Journal gives us a good laugh now and then - but, trust us, the Superbond is no joke.

It is a bundle of bonds or borrowings all floated or raised between 1999 and 2006 - an average of about 150 million Belize dollars a year.

When the Superbond was floated in 2006, its contents were never released locally.

But, on Friday in his budget speech, the Prime Minister listed all that the Superbond contains:..

Hon. Dean Barrow, Prime Minister
"These original debt creatures that had to be caged into this superbond were all without a single exception loans that provided little or no tangible benefit to Belizeans."

"The superbond - it is important to point out is made up of: 2 bear sterns bonds, a US 125 million bond and a US 100 million bond. 2 other bonds; one from the Royal Bank of Trinidad and Tobago Merchant Bank Limited for US 76 million and another from the Royal Merchant Bank and Finance Company for US 25 million. 3 bonds from Citicorp Merchant Bank totaling 1,5 million. 6 promissory notes to the International Bank of Miami for the aggregate sum of 52.5 million. 2 other bear sterns designated design insured loans amounting to 96 million and 2 `short term promissory notes issued in favor in Venezuela for US 50 million - all together 17 separate PUP loans totaling 1.1 billion dollars with an effective average interest rate before the 2000 restructuring of a staggering 11.25%."

The semi-annual interest steps up to 8.5% on the next Superbond payment, which is for 46.9 million BELIZE dollars and is due ON August 20. Sources say government will not make the payment if the debt is not restructured.

Channel 7