Reuters: Financial Services and Real Estate: Moody's cuts Belize credit to Caa, deeper into junk

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Moody's cuts Belize credit to Caa, deeper into junk Jun 1st 2012, 16:21 By Daniel Bases NEW YORK, June 1 | Fri Jun 1, 2012 12:21pm EDT NEW YORK, June 1 (Reuters) - Moody's Investors Service cut Belize's sovereign foreign currency credit rating to C from Caa on Friday, moving it even deeper into junk status and citing a deteriorating ability and willingness to pay its external debt. "Belize faces weak short- to medium-term growth prospects, accumulating contingent fiscal liabilities and a questionable outlook for debt sustainability," Moody's said. In April, a Belize official told Reuters the government is considering options to restructure a $550 million 'super bond' before the next payment is due in August. "Moody's expects that the government will proceed with a pre-emptive debt restructuring this year. The restructuring will be focused on the $547 million Superbond which accounts for about half of the government's debt and is itself the result of a distressed debt exchange completed in 2007," Moody's said. The outlook is set at developing, the firm said in a statement, adding it depends on what the government discloses concerning the terms of a potential debt restructuring. The government's ability to service its debt is likely to weaken because of declining oil-related revenues and rising fiscal liabilities following the nationalization of Belize Electricity and Belize Telecommunications, the firm said. Belize is a small Central American nation of approximately 313,00 people. Standard & Poor's lowered Belize to a CCC-minus rating in March with a negative credit outlook on the nation's foreign sovereign currency debt. Moody estimates the likelihood of a default on the foreign credit as higher than that of the domestic debt, which accounts for less than 20 percent of total government debt. Link this Share this Digg this Email Reprints

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