By Breaking Belize News Staff: The Belize City Council is moving forward with a proposed $46 million bond offering, a figure that towers over the municipality’s annual net profit of under a million dollars, but Deputy Mayor Eluide Miller says the headline number tells the wrong story.
Asked about the offering, Miller was quick to reframe it. “I would not want for anybody to get the idea that we’re taking on $46 million in new investment,” he explained. “We had over $20 million worth of existing investment, and so what is happening is that we are reprofiling that. Meaning that we are turning it from short term investments, one to two year investments in the city, into longer term investments, five to ten year.”
In plain terms, reprofiling means restructuring debt the council already carries, stretching obligations that fall due within a year or two into instruments repaid over five to ten years, easing the annual squeeze on the council’s cash flow. The offering does include fresh borrowing as well. “As a part of that as well, we’re also taking on some new investments,” Miller acknowledged, without detailing the split, “and that has been going well.”
The Deputy Mayor leaned on the council’s track record in the securities market as the foundation of public confidence. “I am proud to say that we have never defaulted on an interest or principal payment, even through the impacts of the COVID-19 pandemic, even through the impacts of Hurricane Lisa, and all the economic implications that came along with that. We have been able to meet every single payment,” he said.
Miller added that the council’s municipal securities remain “one of the most attractive offerings on the financial market,” pointing to ample liquidity among investors, and said the safeguards behind the bonds continue to be maintained. “We continue to do what is necessary to build our interest reserve fund, and our sinking fund, and those continue to be managed properly as well.”
The arithmetic that prompted the question remains the taxpayer’s concern all the same. A council generating under a million dollars in annual net profit is asking the market for $46 million, roughly US$23 million, and while reprofiling reduces the near-term pressure, longer terms mean the city’s obligations stretch years deeper into the future, to be serviced by councils and taxpayers yet to come.
The offering’s reception on the market, and the eventual breakdown between restructured and new borrowing, will tell the rest of the story. For now, the Deputy Mayor’s message is that the city’s credit is good, its record clean, and its plan sound.
The post City Council defends $46 million bond plan as reprofiling, not new debt appeared first on Belize News and Opinion on www.breakingbelizenews.com.
By Breaking Belize News Staff: The Belize City Council is moving forward with a proposed $46 million bond offering, a figure that towers over the municipality’s annual net profit of under a million dollars, but Deputy Mayor Eluide Miller says the headline number tells the wrong story. Asked about the offering, Miller was quick to
The post City Council defends $46 million bond plan as reprofiling, not new debt appeared first on Belize News and Opinion on www.breakingbelizenews.com.