Correa Continues To Keep Debt Hand Hidden

Ecuador’s incoming administration under Rafael Correa, which takes over January 15, continues to keep its options open with regard to the country’s external debt, according to economy minister-elect Ricardo Patiño. Repeated questioning regarding a possible debt restructuring or even default has been met with non-committal from Correa and his team which has limited itself to emphasizing the burdensome nature of the debt servicing. This may be a calculated move to increase investor worries, say some commentators, and retire some of the higher-paying debt at a low price. They point out that Ecuador’s global 2012 bonds – the sovereign’s most expensive debt – carry a call option. Ecuador has $510 million of global bonds due 2012 outstanding, $650 million of bonds due 2015 and $2.7 billion of globals due 2030.