Belize on Friday struck a deal with a majority of its creditors to renegotiate longer terms and lower interest rates, officials said Friday.
"The government of Belize today announced that the holders of 86.17 percent of dollar bonds due in 2029 have exchanged the instruments for new bonds maturing in 2038," said an official statement.
The country needed agreement from at least 75 percent of its creditors to move forward with the deal.
In addition to giving Belize an extra nine years to repay the capital, the interest rate for the first four years will be 5.0 percent, before reverting to the current rate of 8.5 percent.
The new terms will save Belize nearly $20 million in annual interest -- equivalent to around 1.5 percent of the economy of this impoverished Central American nation, which subsists on tourism and a few tropical crops.
In August 2012, the tiny country of just 330,000 inhabitants missed a $23 million bond payment.
In September, it made an $11.7 million interest payment, only about half of what it owed but enough to avoid full-blown default.
Belize -- a low-lying, English-speaking nation on Central America's Caribbean coast -- is famous for diving, fishing, hiking and ecotourism.
Its foreign debt of $1.1 billion is a drop in the bucket by world standards, but a serious challenge for a country already hit hard by poverty and weak economic growth.
The poverty rate is about 40 percent and unemployment around 15 percent in the former British colony, which became independent in 1981.