The new bonds mature in 2029, with principal payments starting in 2019. The bonds will bear interest in the first three years after issuance at a fixed per annum rate of 4.25%. In years four to five, the rate will step up to 6.00%, and thereafter through the maturity of the bonds the interest rate will level off at 8.50% per annum.

The exchange offer was preceded by four months of intensive consultations with the affected creditors by the Belizean authorities.

"On its existing terms," explained Belizean Prime Minister Said Musa, "Belize's stock of external commercial debt is visibly unsustainable. Through this transaction, Belize will have consolidated the debt into a single new series of bonds, improved liquidity for the creditors, stretched out maturities and significantly lowered the average rate of interest on the debt. Over the next five years, this transaction will save an estimated $301 million in debt service costs for Belize in comparison with existing terms."

The launch of the transaction was approved by the National Assembly of Belize last week.

Mark Espat, Minister of National Development of Belize, added: "This operation has been carried out with a strict adherence to the principle of transparency and respect for intercreditor equity. We have worked in a cooperative manner with our creditors and we look forward to their strong support for the transaction."

Tenders by the creditors are due no later than January 26, 2007.

The transaction is expected to close and the new bonds to be issued, during the third week of February 2007.