ZCZC
BCN-04
ECUADOR-ECONOMY-DEBT
Ecuador completes debt restructuring with bond delivery
QUITO, Sept 1, 2020 (BSS/AFP) – Ecuador has finalized the delivery of $15.5 billion of bonds to its creditors following a debt restructure plan, the finance ministry said on Monday.
The plan agreed earlier this month meant the South American country’s debt was slashed by more than $1.5 billion with a reduction in interest rates too.
“Under the Ecuadoran restructure, approximately 98.5 percent of the remaining amount was exchanged for three new bonds totaling $15.5634 billion,” the ministry said in a statement.
The total amount restructured was worth $17.4 billion. Ecuador managed to reduce its interest rate from 9.2 to 5.3 percent while negotiating an increase in its grace period, from two to five years, and an extension to the repayment program from six to 12.5 years.
The bondholders that have signed on to the deal will receive a fourth bond corresponding to the interest accumulated between March and August, worth more than $1 billion.
The deal “allows us to maintain access to international finance and focus on reactivating the economy, generating employment and social protection,” said Finance Minister Richard Martinez.
Ecuador announced last week a preliminary agreement with the International Monetary Fund to increase a support plan for structural reform from $4.2 billion to $6.5 billion.
The IMF predicts the country’s GDP will fall by 11 percent in 2020, largely due to the coronavirus pandemic.
Ecuador has been hard hit by the pandemic, as well as a fall in the price of oil, its main export.
The country’s debt stands at almost $59 billion, worth 60 percent of GDP.
BSS/AFP/MMA/1105HRS