In a statement, Belize’s government said it had “already commenced discussions with the holders of this bond regarding a consensual restructuring instrument.”

“The Step-Up Bond alone represents approximately one-half of Belize’s total recorded public indebtedness,” said Belize Prime Minister Dean Barrow. “The annual interest rate on this bond stepped up earlier this year to 8.5 percent.”

The announcement follows suggestions made during this year’s election campaign that Barrow’s ruling UDP might not make debt service on its $546.8 million debt.

“We simply cannot afford this coupon payment, given the financing shortfalls and other challenges we face,” Barrow said. “Our hope, however, is that we can move quickly toward a sensible restructuring of the instrument.”