The leader of the Central American nation of Belize said his country will not make a US$23m (€18.64m) bond payment by the deadline, bringing the country one step closer to formal default on a total debt of $544m (€440.9m).
Premier Dean Barrow also said his government is unlikely to make the payment during the ensuing 30-day grace period.
Mr Barrow said that his government simply does not have the money to make the payment. He told reporters the government expects to meet with creditors later this week.
The government has offered bondholders a harsh restructuring proposal that would imply reductions in the amount owed, lower interest rates or extended repayment terms.
Belize's government is struggling with a heavy debt from infrastructure projects and recent nationalisations of companies.