Investor Jitters On Ecuador Debt Restructuring

International bond investors are feeling increasingly jittery amid growing signs that Ecuador may opt to restructure its foreign-currency debt. Incumbent president, Alfredo Palacio, has spoken of “debt renegotiation” while frontrunner presidential candidates, León Roldós and Rafael Correa have both mentioned debt restructuring with Correa commenting that he has not discarded the possibility of an Argentina-style debt default. Ecuador defaulted on $6.5 billion of debt in 1999. It currently has about $1 billion of dollar-denominated bonds due to mature in the next 12 months.