The Stan­dard & Poor's (S&P) rat­ings agency said late Fri­day that its se­lec­tive de­fault (SD) for­eign cur­ren­cy rat­ing on Be­lize and its 'D' rat­ing on Be­lize's bond due in 2029 re­main un­changed fol­low­ing the gov­ern­ment's par­tial pay­ment of US$11.7 mil­lion on Thurs­day.

Ac­cord­ing to S&P: "Al­though the terms of the 2029 bond in­clude a 30-day grace pe­ri­od for in­ter­est pay­ments, our rat­ings speak to full and time­ly pay­ment. They al­so ad­dress debt ex­changes that we view as dis­tressed. By ei­ther mea­sure, the gov­ern­ment re­mains in de­fault, based on our cri­te­ria. Resched­ul­ing ne­go­ti­a­tions be­tween the gov­ern­ment of Be­lize and hold­ers of the $547 mil­lion bond due in 2029 are on­go­ing.

Once the like­ly resched­ul­ing terms be­come clear­er, we will pub­lish our ex­pec­ta­tions for a post­de­fault for­eign cur­ren­cy rat­ing. Of the rat­ed sov­er­eigns that have emerged from de­fault dur­ing the past 15 years, post­de­fault rat­ings typ­i­cal­ly have ranged from 'CCC' to 'B'."

Be­lize won a 60-day re­prieve from bond­hold­ers on Thurs­day af­ter pay­ing half an over­due in­ter­est pay­ment, de­lay­ing any po­ten­tial le­gal ac­tion and side­step­ping a full-blown de­fault. Be­lize paid US$11.7 mil­lion in in­ter­est to cred­i­tors as a 30-day grace pe­ri­od on its missed coupon pay­ment ex­pired, but bond­hold­ers said they were hap­py with the pay­ment.

"The gov­ern­ment's de­ci­sion on the coupon pay­ment was tak­en in con­sul­ta­tion with the (bond­hold­er) com­mit­tee and we con­sid­er it a ma­te­r­i­al and good faith step in the right di­rec­tion," said AJ Medi­rat­ta of Grey­lock Cap­i­tal Man­age­ment, co-chair of the com­mit­tee rep­re­sent­ing the ma­jor­i­ty of bond­hold­ers.

That show of good­will prompt­ed cred­i­tors to agree to re­frain from tak­ing le­gal reme­dies against Be­lize for 60 days, to al­low re­struc­tur­ing ne­go­ti­a­tions on the US$550 mil­lion su­per­bond to con­tin­ue. "We view these lat­est de­vel­op­ments in a pos­i­tive light, as both par­ties seem to have be­gun ne­go­ti­a­tions in good faith," No­mu­ra strate­gist Boris Se­gu­ra said. "Let's see if 60 days is enough for a ne­go­ti­a­tion process that has not been smooth so far."

The gov­ern­ment has laid out three pro­pos­als for resched­ul­ing its bond pay­ments, shock­ing cred­i­tors with its sug­ges­tion that they take a hair­cut of up to 45 per­cent on their in­vest­ment. But now bond­hold­ers hope that an agree­ment that bal­ances the in­ter­ests of both par­ties could be reached in the near term, said Mike Ger­rard of Broad­Span Cap­i­tal, fi­nan­cial ad­vis­er to the com­mit­tee.

The gov­ern­ment of Be­lize missed an ap­prox­i­mate­ly US$23 mil­lion coupon pay­ment due on Thurs­day. Al­though the terms of the 2029 bond in­clude a 30-day grace pe­ri­od for in­ter­est pay­ments, S&P said that its rat­ings speak to full and time­ly pay­ment. Be­lize's gov­ern­ment, which had said orig­i­nal­ly it did not have enough mon­ey to pay the in­ter­est on the bond, said in a state­ment it had agreed to a com­mon frame­work with cred­i­tors to push along ne­go­ti­a­tions.