Putting Belize In Perspective - The Superbond

A Study in Belize Sovereign Debt… Superbond.

As of march 2011, Belize’ s total national debt (both external and domestic) was US $1.016 billion, an amount equivalent to approximately 75.3% of GDP.

The face value of the Superbond (the total public external commercial debt of Belize) is roughly half that amount, or $544 million USD. This was issued by the country of Belize on international markets in 2007, and would bear interest-only for 12 years, with maturity in 2029. The coupon on the country’s so-called Superbond went to 8.5 percent this year from 6 percent, as part of the bond structuring. The current price of Belize’s dollar bonds due in 2029, was 34.83 cents as of August 20, 2012.

That gives a current bond value of approx. $350 million US.

To put matters in perspective, the government of Greece has taken $305 billion (with a “B”) of bailout loans from the European Union and IMF since May 2010. This is in addition to the negotiated debt write-off of additional billions.

In contrast, Belize has no burden of poverty.

While neighboring Guatemala has a population of 14,750,000 (2011), the population of Belize is only 356,600 (2011). Guatemala’s population is 41x greater than that of Belize, in a land area only 4.7 times larger. (Population density of 351 per sq. mile

versus 40 per sq. mile). Belize has the 4th lowest population density in the western hemisphere (behind Canada, Guyana, and Bolivia).

Belize is a net exporter of citrus, bananas, sugar cane, and other fruits and vegetables.

Belize is a net exporter of shrimp, tilapia, cobia and other fishes.

Belize is a net exporter of petroleum…one of only 27 countries in the world, among oil-trading nations.

Belize exports 5.5 times its domestic consumption of petroleum.

46% of Belize is National Park and Marine Reserve, one of the highest percentages, if not the highest, anywhere in the world.

The 256-acre island of Caye Chapel in Belize, recently sold to the Sovereign Wealth Fund of Qatar (SWFoQ) for an amount at or above $42 million US. The island will be developed as a flagship Four Seasons Resort - the first branded flagship resort in all of Belize. The total development cost is projected to be $180-200 million US. Equal to more than half the current bond value of the Superbond.

That helps to put matters into perspective.

This is the same group (SWFoQ) that last year purchased Harrod’s department store in London, US for £1.5 billion ($2.376 billion US). You read that right….Harrods department store, taking up one full city block in Knightsbridge, sold for 7 x more than the current value of the Superbond, and almost 1.5x the total national debt of belize. That helps to put matters into perspective. (They also made a failed bid to purchase Manchester United football team for the same amount…£1.5 billion.)

The country of Belize has a total marketing and advertising budget of $6 million US. This includes the combined efforts of the Belize Tourism Board ( BTB), the Belize Tourism Industry Association (BTIA), and the Belize Hotel Association (BHA), and other sources. (By comparison, the Dominican Republic has an annual marketing budget of $71 million US.) In January 2012, the Four Seasons luxury hotel chain unveiled a new website that cost $18 million to develop. 3x the total marketing budget of Belize…and 1/10 of the current bond value of the sovereign

debt.

That helps to put matters in perspective.

Overnight visitors to Belize overall, were up 9% for the first half of 2012. Those visitors arriving through Goldson (Belize) International Airport were up 13.8% for the first 6 months of 2012, year-over-year. 2012 tourism numbers are the highest on record,…in excess of the previous highs of 2006 and 2007.

Belize has hired New York-based law firm Cleary Gottlieb Steen & Hamilton LLP to advise the government on the restructuring of the bond. Cleary Gottlieb is the same firm that was hired by Argentina in its debt structuring following the country’s default on $95 billion of bonds in 2001.

Sources in the administration of Prime Minister Dean Barrow, have said this week that the missed interest payment on the bond was a deliberate negotiating tactic under advisement of their counsel. Belize has offered three different debt renegotiation scenarios, published by the Central bank on August 8, 2012. Those various scenarios would result in a lowering of the current bond value from 34.83 cents to 20-22 cents. The answer likely lies somewhere in between the current value and what has been proposed.

The debt restructuring in Greece earlier this year resulted in a price of 29 cents on the dollar, by comparison.

It should be noted that Prime Minister Barrow was the most successful, and arguably best negotiator and most accomplished attorney in Belize, before becoming Prime Minister. He has hired the top law firm in the world for negotiating sovereign debt matters, to advise the government on the restructuring.

At the end of the day, there are very few countries in the world that realistically can sell a few of their several hundred islands, or a few hundreds of thousands of acres of native jungle, in exchange for wiping out the total sovereign debt.

That too, should help put matters in perspective.

(This article written by By John D Turley August 29, 2012)

The Coast of Ambergris Caye from Basil Jones North all the way to the Southern Tip.

Next time I think I'll have the window open. 

Some Corrections to the Belize Page of "Live and Retire Overseas"

http://www.liveandinvestoverseas.com/ is a very informative web site giving potential retirees lots of great information. There's a very good Belize section which was written in 2009 and updated as recently as this year. There is the odd inaccuracy, though, which The Pelican Team will attempt to bring to the attention of the Live and Invest Overseas.

http://www.liveandinvestoverseas.com/best-places-to-retire/belize.html

We will need to point out that our Transfer Tax (ie. how much of the purchase price you pay to the Government when you buy a property) is just 5% and NOT "10% plus 2% Attorney Fee." In most cases you would not even need an attorney to assist with land transfer. There are great real estate paralegals who will execute the transfer for a fixed fee which in the vast majority of cases is far less than 2% of the purchase price.

We were flattered to see a photo taken by one of your humble Pelican Team bloggers appear on the Belize page of this excellent retirement newsletter.

Why Ambergris Caye, Belize?

Very good Retirement Newsletter, this from Live and Retire Overseas.


Ten years ago, the government of Belize enacted legislation to allow Qualified Retired Persons (QRP's) to obtain permanent residency in this country. In many ways, this program is the most efficient route to foreign residency anywhere in the Americas. And, while the QRP visa allows you full-time residency, you can enjoy the benefits of being a QRP even if you spend as little as two weeks a year in Belize.
Belize's QRP program offers not only the equivalent of a U.S. Green Card to foreign residents aged 45 and older, but it also grants a host of other incentives designed to encourage foreigners to come and bring their money. These incentives include a permanent exemption from all Belize taxes, including income tax, capital gains tax, estate tax, and import tax on household goods (up to US$15,000), automobiles, boats, even airplanes. The only requirements are that you or your spouse be 45 years of age or older, that you consider yourself to be retired, and that you show that you have at least $2,000 a month in income to support yourself in Belize (from a pension or some other regular income).
In practical terms, the "consider yourself to be retired" requirement means that, as a QRP, you can't apply for a work visa. This is not to say that you couldn't do international, Internet, or even local Belize business as an entrepreneur. You just can't take on traditional "employee" work.
Under these circumstances, the benefits of the QRP program could be significant, especially if you have active business income from outside the States. In this case, as a non-resident American, your first US$92,900 (or US$185,800 as a couple) in foreign-earned income would be exempt from U.S. tax. And, again, as a QRP, you're also exempt from Belizean tax.
For more information on qualifying as a QRP resident in Belize, get in touch here, or access our Belize Country Page.
More soon,


Kathleen Peddicord
Publisher, Live and Invest Overseas
Follow us on Facebook and Twitter
email: CustomerService@LiveandInvestoverseas.com
web: http://www.liveandinvestoverseas.com

San Pedro, Ambergris Caye panoramas.

A couple of stitched panoramas taken a couple of days ago on a Tropic Air charter. The pilot, Scott, was marvelous, as are all of our Tropic Air and Maya Island Air pilots. Think about it..every time you're on a flight and they land safely you owe them your life.

Click on the photos for big 'uns.

This is the San Pedro Town Center.

The Phoenix to San Pedro High School

Apple vs. Samsung...a tainted jury?

Consider the verdict today in Apple's battle with Samsung in a U.S. court. Nine carefully selected jurors found that U.S. giant Apple now has a patent on rounded corners, among other things. Basically if you produce some sort of mobile device with a rounded corner you're infringing on Apple turf and your products may be banned from the U.S. markets.

Now, I can only speculate as to the high qualifications of each juror which enabled them to come to such sweeping conclusions in Apple's favour on the correct answers to 600 questions they were asked to ponder in this case. Let's look at what those juror qualifications might be:

1. Some were carefully selected because they probably didn't have good enough jobs to go to. Or at least they were selected because their jobs were so lousy they couldn't come up with excuses good enough to get off the duty.

2. Most probably own Apple devices. No conflict of interest there then, no sir!

3. Most were probably not illegal immigrants, although these days in Obama's USA you never know. This means they were all U.S. citizens and were therefor already biased to handing a verdict and a fat cash award in favour of poverty-stricken U.S. company Apple. Those damn Koreans with their awful fat little dictator making the population starve to death....oh, wait, that's ANOTHER Korea although anyone too stupid to get off jury duty probably wouldn't know that.

So as you can see there is no way we can say the verdict today was tainted in any way. Although I suspect Samsung will probably feel they have grounds to appeal starting with "The Jury were all as thick as bricks" and going on from there.

This was a very bad day for competition in the U.S..It was definitely worse than any verdict handed down in the past in favour of previous Apple competitors such as Microsoft who somehow now seem all warm and cuddly in comparison to the Apple monopoly-seeking juggernaut.

Very Affordable Ambergris Caye condominium for sale. Great area, just 10 golf cart minutes from San Pedro Town Center.

Proof that a comfortable condo on Ambergris Caye need not cost a fortune: Comfortable ground floor condominium in well-regarded residential area of Ambergris Caye. Less than a mile and a half to San Pedro's bustling town center.

The unit is one of only 3 in this condominium building.

Pictured furnishings included. This condo comes with a good sized kitchen. Central air conditioning.

Ample storage space in bodega which could be converted to condo use if required.

Cute private fenced patio area in front of entrance.

http://belizerealestate.com/jok.html for details.

Google Earth and Ambergris Caye...one of them is OUT OF DATE!

Google Earth really is state of the art stuff with its  street level cameras, 3D topography. It's the space age personified, an amazing tool for everyone looking to get an idea of the layout of a mysterious new destination they might be visiting. 

Don't take the Ambergris Caye aerials too literally, though. This is Grand Caribe according to Google Earth. I guess the bush grows quickly in the Tropics.

Seriously, Google, please put some updated photos of Ambergris Caye on your otherwise fabulous Earth program. Imagery 10 years or older really is pathetic. Which spacecraft took the photo, was it Sputnik?

Back to Ambergris Caye Properties For Sale

OK, we have entertained you enough for now with posts of pretty girls, night views and opinions....back to some serious property listings! 

100ft by 400ft pristine beachfront investment property in stunning Robles area of Ambergris Caye, 16 miles from San Pedro Town Center. $150,000US, super investment. Click here for details and photos.

This beautiful oceanfront parcel is located 9.5 miles north of San Pedro Town in the Habaneros subdivision. It's Lot D14. It's just a couple of hundred feet from Brightwaters Beach Resort. All high elevation, fantastic value for money! Asking just $245,000US for 90ft of pristine oceanfront by over 200ft depth. Click here for photos and more details.

Can You Trust Trip Advisor?

Why must you be careful when using "www. tripadvisor .com" to research hotels? It's because a lot of the reviews are totally bogus because ANYONE can post. This includes people who have never used the hotel in question.

 Some reviews are overly positive. Often it's the hotel plugging their place using multiple Trip Advisor accounts. Some are negative to the point of slander. Quite frequently it's people who know the hotel owner, perhaps, and have a grudge. 

 If you want a much more accurate idea as to whether you should stay at a hotel then use the Expedia or Travelocity reviews instead. Those sites only allow you to post a hotel review if you have actually booked the hotel through them and completed your stay.

Ambergris Caye....a True Paradise!

Anyone know these beautiful and friendly girls? I was just walking the beach and I noticed them at Grand Caribe this weekend and snapped these totally random shots. You see amazingly gorgeous people like this all the time on our Isla Bonita, you really should visit!

Another Evening at Grand Caribe, Ambergris Caye, Belize

nice dinner party scene....taken from our veranda at Grand Caribe this evening.

A good day at work on beautiful Ambergris Caye

What a great day it was today. Had some quality showings this morning. Better still, late this afternoon I was able to save another couple from making what would have been a financially disastrous real estate purchase. 

Some real estate agents on this island will say ANYTHING to sell a piece of swampland in the middle of nowhere with no prospect of it being any use for anything. The best way for real estate agents and brokers to make a great living on Ambergris Caye is to tell the truth, even if the truth is sometimes something their clients won't want to hear.

(photo above has nothing to do with this post except just like the article it happened today, this evening, actually).

Ambergris Caye...taken from our balcony at Grand Caribe...Boat Dancing In Storm

Hope the lines hold! Taken at 10:00am on Wednesday 8th August, this is the "tail" of Hurricane Ernesto making this boat do the conga. First few seconds are a bit shaky.

Ambergris Caye Avoids Hurricane Ernesto (or the other way around)

This is it, Hurricane Ernesto causes 20mph winds on our island. The views you see here taken around 3:00pm on Tuesday 7th August. Snorkeling on reef not recommended.

Well, Someone Has to Live Here and it Might as Well be us!

The view might not be quite as agreeable in a couple of days. Our little friend Ernesto looks like it'll give us some mucky weather from Tuesday for  a day or two. At least this video will show you why we live here! Taken Sunday August 5th 2012.

Better News on Tropical Storm Ernesto

A day later and Tropical Storm Ernesto is forecast to make landfall over Belize...but as a tropical storm and not a hurricane which is a relief. There's a very good chance it might yet dive south and miss us more or less altogether.


Once it has passed you might like to check on your insurance!

That Time of The Year

Every year we have to go through something some call "Hurricane Season." Some folk, including real estate agents, like to say that we don't get many hurricanes in Belize. Be that as it may - and it isn't because we've had our fair share - it's important to realize that it only takes one of these nasty buggers and your life is back to "Square One"....unless, that is, you are properly prepared.


 So, how can you prepare for a storm? It's easy, MAKE SURE YOU HAVE PROPER INSURANCE. Insure your house, condo, golf cart, personal effects, and even insure your boat. Although, if your experiences with boats are anything like mine just sell the damn thing right now. Make sure the insurance coverage reflects the true replacement value. Under insuring is false economy (or "Plain Daft") and is not recommended. 


 If you think you can't afford insurance picture this: Imagine how you'll feel when a hurricane is taking dead aim at Belize and your hard earned uninsured assets are in the way. Whoops. Too Late.

Just North of the Bridge on Ambergris Caye...what a difference to the road!

Mayor Danny Guerrero has been hard at work bringing in road fill and reducing the "Embarrassment Factor" of our road north of the bridge. A well known developer helped with financing but Danny deserves a lot of credit for getting Central Government to pony up some tax dollars too. Here's a trip I did past Reef Village today: A little bumpy but what an improvement from the pot holed morass we had to put up with a couple of months ago!