S&P Cuts Belize's Rating On Expected Miss Payment

And late this evening, Belize's sovereign-credit rating was pushed further into junk territory by Standard & Poor's. S&P downgraded Belize's credit rating to a double C from a triple C-minus after the Barrow Administration officially announced that it won't be making its $46 million bond coupon payment on August 20th.

In an article posted on online.wsj.com S&P states and we quote

"The outlook is negative, reflecting prospects the firm could lower the ratings to selective default if Belize's government misses its payment as announced or if it proposes a debt exchange to investors." End quote.

If the Barrow Administration fails to pay the bondholders within 30 days of August 20TH, it will default on its debt. S&P expects GOB to fund its gap through the exceptional financing of default, import compression and a drawdown of reserves. The rating cut is the latest in a series of downgrades this year from S&P and Moody's Investors Service, as both rating firms cited concerns about the possibility of another debt restructuring. In June, Moody's downgraded Belize's sovereign debt rating to Ca, pushing it deeper into highly speculative territory. Late this evening the Opposition People's United Party weighed in on the much discussed issue of Governments default on its $46 million bond coupon payment. According to the PUP "The Leader of the Opposition was neither consulted on nor informed of this very critical decision which has very serious implications for Belize's economy and development. During the Budget debate for 2012/13 the Nation was led to believe that the government had budgeted for this payment and would be honoring the August 20th, 2012 payment." End of quote. The PUP concludes their press release by calling on the Prime Minister and Minister of Finance to immediately address and inform the Nation on the specific reasons for the decision and the consequences and implications expected to follow.