Belize `Superbond' Sinks Most Since '13 as Election Proceeds

  • Bond returns are among Latin America's top performers YTD
  • Lower commodity prices, Petrocaribe pose risks, IMF says

Belize’s bonds fell the most in more than two years as voters in the Central American nation decide Wednesday whether Prime Minister Dean Barrow deserves a third term in office.

The yield on Belize’s “superbond” due in 2038 rose 56 basis points to 10 percent at 2:50 p.m. New York time. That’s the highest since the security was offered as part of a $544 million debt restructuring in 2013, following two defaults in six years. Belize’s debt has returned 11.7 percent so far this year, the most in Latin America after Venezuela and Argentina, according to JPMorgan Chase & Co.’s EMBIG index.

Barrow has served as prime minister since 2008 and faces opposition leader Francis Fonseca, who has pledged to create 25,000 jobs and cut living costs. About 197,000 people are eligible to vote in the country, which has a population of 341,000 and is known among international tourists for its Mayan ruins and barrier reef. Election results for all 31 seats in parliament are expected Thursday morning.

Barrow has promised to boost infrastructure spending and expand trade if elected. He dissolved the legislature in September and called snap elections. At the time, the 64-year-old said that the bond restructuring saved the country $500 million and public finances are “robust.” The International Monetary Fund said in July that public debt could rise “significantly” in the short to medium-term and that lower commodity prices and changes to the Venezuelan-led Petrocaribe oil-financing program pose risks to Belize’s economy.

The country’s gross domestic product shrank 1.6 percent year-on-year in the second quarter and the IMF said it expects growth to fluctuate around 2.5 percent annually.

(An earlier version of this story was corrected to say Belize defaulted twice in six years, not three.)

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