Fitch Assigns 'A' Rating To Belize Bonds

by Mike Godfrey, Tax-News.com, Washington

15 March 2007

Fitch Ratings has assigned an 'A' rating to Belize Sovereign Investments III Limited Notes (BSI III).

BSI III issued approximately $86 million in two tranches of pari passu debt from a Cayman Island special purpose vehicle (SPV) with an expected maturity of 2029.

Repayment of the notes is backed by two restructured Government of Belize (GOB) sovereign obligations, as well as two insurance policies underwritten by Steadfast Insurance Company. Each GOB obligation has its respective insurance policy, which directly covers any non-payment by the GOB.

The rating of the notes is supported mostly by the financial strength of the insurance provider, and to a lesser extent, the default probability of the GOB. In assigning the rating, Fitch took into consideration limitations to the policy's claims-paying probability. Specifically, Fitch focused on the policy's conditionality, termination events and claims-paying process, which could cause delays to timely debt service payments.

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