Belize looks to restructure debt, hires Houlihan Lokey

New York, Aug. 2 - Belize said it is planning to restructure the $960 million of external debt held by private sector creditors.

To help with negotiations, the country has hired Houlihan Lokey Howard & Zukin as financial advisor.

Belize said it expects most of the external commercial debts of Belize and its public sector entities will be affected by the "debt rearrangement."

The government will also be approaching official-sector creditors.

Since October 2004, Belize has cut its deficit to 3.1% of gross domestic product for the fiscal year 2005/6 from more than 8% in fiscal 2004/5 and the level is expected to decline further.

But the country said its debt burden remains "unsustainable," with more than 27% of the government's fiscal revenue going on interest payments.

"Servicing of the Belizean external public sector debt stock on its existing terms is no longer a viable option," said Said Musa, prime minister and minister of finance of Belize, in a news release. "We must urgently ask the cooperation of our creditors to help put this debt stock on a sustainable financial footing."

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