San Pedro Town Council introduces Municipal Securities

On Wednesday, December 4th, the San Pedro Town Council (SPTC) presented their project, Municipal Securities (Municipal Bonds and Notes). This initiative will enable residents to invest in a fund to develop the municipality further. Currently, the program allows accredited stakeholders to invest in SPTC Municipal Securities with a commitment to repay them with interest over time. The program is expected to be public by the end of January 2025.
This initiative is yet another effort by the local town administration to raise funds for additional public goods and services, including streets, drains, lighting, parks, and other responsibilities. During a presentation on Wednesday, Mayor Gualberto “Wally” Nuñez emphasized that when island residents invest in these Municipal Securities, they contribute to the ongoing development of the island while also earning interest on their investment. “It’s a win-win situation,” he stated. Nuñez added that the securities are tax-free, meaning that all principal and interest earned will not incur any tax deductions.
The town board is now authorized to issue securities following the passage of the Municipal Securities Act of 2023. According to the Mayor, this new legislation enables his administration to offer medium—and long-term securities, including municipal notes and bonds.
During the presentations, it was explained that if the SPTC borrows money with a repayment agreement that spans more than one year but less than ten years, the issued securities are referred to as Municipal Notes. Conversely, the securities are called municipal bonds if the repayment period exceeds ten years.
Currently, the SPTC offers municipal notes and bonds with terms ranging from five to 20 years, with interest rates ranging from 5.0% to as high as 6.50%.
How to apply for the Municipal Securities?
Municipal Securities are available exclusively to accredited investors, with the subscription closing date set for March 31, 2025. Accredited investors are defined as individuals or entities with sufficient financial knowledge, resources, or experience to participate in securities investments.
Interested parties can apply by contacting Legacy Fund Limited, the registered securities agent in Belmopan’s capital, in collaboration with the SPTC. They can be reached at 822-1794 or via email at [email protected].
An accredited investor can start investing with $5,000 but needs to prove that they have assets valued at a minimum of $100,000. Mayor Nuñez stated that retail investors, or the average person, will be allowed to invest in the securities at the end of January, following the completion of the current audit on the SPTC. Retail investors will have the opportunity to purchase securities at a much lower price.
The process of paying the interest on Municipal Securities
According to the SPTC, interest on the securities will be paid semi-annually on March 1st and September 1st of each year. Investors who purchase securities now will receive their first interest payment on March 1, 2025. This payment will be made directly to the credit union or bank account information provided during subscription time. When the Municipal Security matures, the principal amount and the interest earned in the last month will be returned.
Additionally, investors can retrieve their funds before the securities mature by either selling their Municipal Securities to an interested buyer or through a bond call initiated by the SPTC. In the latter case, the principal and the interest earned to date will be refunded. The Municipal Securities are callable after 2040.
If the SPTC defaults on repaying the securities or bonds, investors may deduct the equivalent amount from any payments due to the town board. This may include obligations such as property taxes, trade license fees, or other fees owed to the town board.
The SPTC is also organizing an educational campaign for potential investors in the coming weeks. During these meetings, those interested in investing in Municipal Securities and Bonds will be able to learn more about the program and become part of this municipal initiative.
Nuñez concluded by emphasizing that by investing in the SPTC Municipal Securities, islanders will contribute to the growth and development of San Pedro Town on Ambergris Caye. He stated that this investment will provide the town council with the necessary funds to enhance and expand the island’s infrastructure, including bridges, new streets, improved drainage, and additional public spaces such as parks.