{"id":6095,"date":"2012-08-20T13:44:16","date_gmt":"2012-08-20T17:44:16","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=6095"},"modified":"2012-08-20T13:44:16","modified_gmt":"2012-08-20T17:44:16","slug":"belize-is-defaulting-on-debt-payment-whos-next","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/belize-is-defaulting-on-debt-payment-whos-next\/","title":{"rendered":"Belize is defaulting on Debt Payment, Who’s Next?"},"content":{"rendered":"

\"\"<\/a>\"\"<\/a><\/p>\n

Dear PGM Capital<\/strong> Blog readers,
\nBelize<\/a>, a Central American nation, today<\/em> announced that they will miss a coupon payment on about US$544 million<\/strong> of bonds and is unlikely to pay creditors during a 30-day grace period that starts today:<\/p>\n

The Central American nation, which owes investors about US$23 million<\/strong> today, can\u2019t make the payment, Waight said in a phone interview from Belmopan City.<\/p>\n

The government has been in talks with debt holders about a restructuring, its second since 2007.<\/p>\n

\u201cWe simply do not have the capacity to make the payment,\u201d Waight said. \u201cWe are hoping to engage with creditors as quickly as possible.\u201d<\/p>\n

Source<\/a><\/p><\/blockquote>\n

Belize Financial Secretary, said investors have had enough warning that a restructuring was coming and added the terms presented are necessary to close the country’s budget gap.<\/p>\n

Belize has hired the law firm Cleary Gottlieb to advise the government on the restructuring, Waight said. Cleary Gottlieb was the law firm, which \u00a0assisted Argentina in its debt restructurings following the country\u2019s default in 2001.<\/p>\n

Credit rating Agency, Standard & Poor has a CCC+ rating on Belize, with negative outlook, while Moody’s has rated Belize debt as B3.<\/p>\n

As you can see from below table these credit rating agencies consider Belize sovereign debt as\u00a0Highly speculative with substancial risk.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Moody’s<\/th>\nS&P<\/th>\nFitch<\/th>\n<\/th>\n<\/tr>\n
Long-term<\/td>\nShort-term<\/td>\nLong-term<\/td>\nShort-term<\/td>\nLong-term<\/td>\nShort-term<\/td>\n<\/td>\n<\/tr>\n
Aaa<\/td>\nP-1<\/td>\nAAA<\/td>\nA-1+<\/td>\nAAA<\/td>\nF1+<\/td>\nPrime<\/td>\n<\/tr>\n
Aa1<\/td>\nAA+<\/td>\nAA+<\/td>\nHigh grade<\/td>\n<\/tr>\n
Aa2<\/td>\nAA<\/td>\nAA<\/td>\n<\/tr>\n
Aa3<\/td>\nAA-<\/td>\nAA-<\/td>\n<\/tr>\n
A1<\/td>\nA+<\/td>\nA-1<\/td>\nA+<\/td>\nF1<\/td>\nUpper medium grade<\/td>\n<\/tr>\n
A2<\/td>\nA<\/td>\nA<\/td>\n<\/tr>\n
A3<\/td>\nP-2<\/td>\nA-<\/td>\nA-2<\/td>\nA-<\/td>\nF2<\/td>\n<\/tr>\n
Baa1<\/td>\nBBB+<\/td>\nBBB+<\/td>\nLower medium grade<\/td>\n<\/tr>\n
Baa2<\/td>\nP-3<\/td>\nBBB<\/td>\nA-3<\/td>\nBBB<\/td>\nF3<\/td>\n<\/tr>\n
Baa3<\/td>\nBBB-<\/td>\nBBB-<\/td>\n<\/tr>\n
Ba1<\/td>\nNot prime<\/td>\nBB+<\/td>\nB<\/td>\nBB+<\/td>\nB<\/td>\nNon-investment grade
\nspeculative<\/td>\n<\/tr>\n
Ba2<\/td>\nBB<\/td>\nBB<\/td>\n<\/tr>\n
Ba3<\/td>\nBB-<\/td>\nBB-<\/td>\n<\/tr>\n
B1<\/td>\nB+<\/td>\nB+<\/td>\nHighly speculative<\/td>\n<\/tr>\n
B2<\/td>\nB<\/td>\nB<\/td>\n<\/tr>\n
B3<\/td>\nB-<\/td>\nB-<\/td>\n<\/tr>\n
Caa1<\/td>\nCCC+<\/td>\nC<\/td>\nCCC<\/td>\nC<\/td>\nSubstantial risks<\/td>\n<\/tr>\n
Caa2<\/td>\nCCC<\/td>\nExtremely speculative<\/td>\n<\/tr>\n
Caa3<\/td>\nCCC-<\/td>\nIn default with little
\nprospect for recovery<\/td>\n<\/tr>\n
Ca<\/td>\nCC<\/td>\n<\/tr>\n
C<\/td>\n<\/tr>\n
C<\/td>\nD<\/td>\n\/<\/td>\nDDD<\/td>\n\/<\/td>\nIn default<\/td>\n<\/tr>\n
\/<\/td>\nDD<\/td>\n<\/tr>\n
\/<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The big question most investors are asking themselves is who’s next to default?<\/p>\n

The lessons that investors must learn from these is to never invest in any country or debt security which is “Non Investmentgrade<\/a>“.<\/p>\n

Secondly, investors must be aware that we are approaching the bottom of the current “Kondratieff Winter<\/a>” and the “Exter’s Pyramid<\/a>“.<\/p>\n

History has proven that in these bottom, credit dries up, default (risk) increase and gold will excel.<\/p>\n

Another question investors might be asking them selves is.<\/p>\n

Will we also be approaching the end of the Fiat Money system?<\/span><\/p>\n

Due to this we advise investors and the middle class to exchange their paper\u00a0or\u00a0<\/strong>fiat-money<\/span><\/a>\u00a0for Real Money:<\/strong>\u00a0Gold, Silver, and other precious metals.<\/span><\/p>\n

Before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Commodities, Precious metals as well as the stocks of their producers can be very\u00a0volatile and that sharp corrections may happen in the short term.<\/p>\n

Yours Sincerely,<\/p>\n

Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"

Dear PGM Capital Blog readers, Belize, a Central American nation, today announced that they will miss a coupon payment on about US$544 million of bonds and is unlikely to pay creditors during a 30-day grace period that starts today: The Central American nation, which owes investors about US$23 million today, can\u2019t make the payment, Waight[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,8,33,19,16,1,18],"tags":[],"class_list":["post-6095","post","type-post","status-publish","format-standard","hentry","category-commodities","category-debt-crisis","category-eric-de-vries","category-financial-news","category-precious-metal","category-uncategorized","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/6095","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=6095"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/6095\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=6095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=6095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=6095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}