Mayor Darrell Bradley and the Belize City Council are pressing ahead with the issue of a 20-million-dollar municipal bond, which will be used for infrastructure development in Belize City.
According to Mayor Bradley, the issue of a municipal bond is unprecedented not only in Belize, but in the entire Caribbean. Even so, Bradley held a press conference on Monday, July 23rd, in which he expressed great enthusiasm at the prospect of issuing the bond. The bond, he says, will be issued in two tranches; the first will be comprised of two issues; one being for 3 million dollars bearing interest between 3.5 and 4.5 percent for 2 years. The second issue on the first tranche will be for 7 million dollars for 5 years and bearing interest at between 4.5 and 5.5 percent. The second tranche will be for 10 million dollars for 8 years and will bear interest at between 5.5 and 7.5 percent.
According to Ervin Perez of Legacy Fund, the company that is in charge of the bond issue, they have been aggressively marketing the bond and so far, there has been great interest in it. They have taken the investment opportunity to financial institutions, as well as insurance companies and the Social Security Board, and the reception has been overwhelming. Mayor Bradley says that the prospectus will be prepared by the middle of August and within a week of that release, they expect to have sold off the first 3-million-dollar portion of the bond.
Bradley said that the Bond program is designed in such a way that the average Belizean will be able to invest and as such, they will be offering bond certificates in 200-dollar denominations. For the two issues of the first tranche, payments to holders are proposed for February and August of each year for the life of the bond while the second tranche will see payments in May and November. And for those who choose to invest in the bond, both Bradley and Perez guarantee payment to the holders. A sinking fund will be established, which will be financed through existing secure revenue streams that include government's yearly subvention to the council as well as the BTB's head tax that is paid to the Council. These two revenue streams will secure the first tranche of the bond. The second tranche will be secured by asset-backed collateral and the Council is looking at putting the Commercial Center and the NICH parking lot on Regent Street as that collateral.
Speaking at the bond presentation, Mayor Bradley pointed out that there is a need for it since the council's revenue is tied up mostly in salaries and sanitation. He said that 70 percent of the revenue is taken up by these two expenses. He noted that with the issue of the bond, the Council will have more financing to do a lot more streets. Currently, the Council has done work on 14 streets at a cost of $939,356.03. Work will now commence on Freetown and Barrack Roads parts of Princess Margaret Drive and the intersection of Ceasar Ridge Road and Central American Boulevard. This will be financed through internal council revenues. The bond will be used to 10 other streets in the city including Craig Street, Hyde's Lane, Cran Street, North Front Street, New Road, Mapp Street, Douglas Jones Street, Wilson Street, Sixth Street, Mex Avenue and Allenby Street.
With that scope of work, the Mayor says he's expecting quick sale for the bond for the work to be executed as soon as possible.