The ruling United Democratic Party won a majority of 17 seats in the 31-seat parliament to the opposition People’s United Party’s 14, chief elections officer Josephine Tamai said.
Official results are not due until later on Thursday as final checks are still being made, she added.
Prime Minister Dean Barrow said before the election his first act, if re-elected, would be to win more favorable terms for Belize’s so-called superbond, which makes up half the country’s debt and 40 percent of gross domestic product.
The interest rate on the bond stepped up to 8.5 percent this year and will account for 12 percent of estimated annual government revenue. The country of 313,000 people faces a further squeeze when principal repayments come due in 2019.
“The first thing that we do after being re-elected is to announce an appointment of a team to go and renegotiate that superbond to give us better rates – far better rates because we aren’t taking it anymore,” Barrow said on Feb. 19.
So far the 61-year-old lawyer has given no details of what he might suggest to creditors. Analysts said outright default was unlikely but options might include a request for lower interest rates, delayed principal repayment, cash-flow relief or an extended maturity on the 2029 bond.
“He never said what exactly he wants to do, but everyone is interested in how to make those payments because it will mess up our income,” said fishery department worker Remaldo Acosta, 40, lining up to vote on Wednesday in the town of San Pedro on Ambergris Caye, off Belize’s northern coast.
Ratings agencies Moody’s Investors Service and Standard & Poors downgraded Belize’s foreign-currency sovereign rating well into ‘junk’ territory in February after Barrow’s comments.
S&P analyst Kelli Bissett said the CCC-minus rating and negative outlook reflected the high risk of default, or at least restructuring ahead of a scheduled August interest payment.
“Our best-case scenario reflects the expectation that a restructuring announcement from the government could come some period after the elections, possibly by August,” she said last week.
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Belize, about the same size as Massachusetts, is better known for its laid-back atmosphere and pristine coral reef than as an international investment destination.
But the bonds’ inclusion in JP Morgan’s benchmark EMBI Global Index means they are likely held by more fund managers than the issue’s relatively small size suggests. JP Morgan has an “overweight” recommendation on the bonds.
Belize’s total debt accounts for about 80 percent of GDP, or $3,200 per head – lower than the 150 percent debt ratio Argentina had when it defaulted in 2002, but well above the sub-10 percent Ecuador enjoyed in 2008, when it defaulted on $3.2 billion in global bonds.
International Monetary Fund estimates show Belize, whose $1.25 billion economy relies heavily on tourism and agricultural exports like sugar and bananas, was the world’s 13th most indebted nation in 2011.
Per capita economic output is half the Central America and Caribbean average and almost half the 313,000 population – a mix of Creoles, Spanish-speaking Mestizos, Maya Indians, African-descended Garifuna and German-speaking Mennonites – lives in poverty.
As well as the economy, offshore oil drilling and security were also key election issues, after the homicide rate rose 70 percent between 2005-10 to 41.7 murders per 100,000, on a par with neighboring Guatemala, according to the United Nations.
“I wouldn’t like drilling off our beautiful island,” said primary school teacher Maria Guerrero, 49, a native of San Pedro. “I want to keep it so my grandson can enjoy it too.”
The ruling party, which enjoyed a 19-seat majority in its first term in office, has promised to hold a referendum on offshore drilling and to cut the murder rate back to 25 per 100,000.