Fitch Downgrades Ecuador To CCC

Fitch Ratings has downgraded the long-term foreign currency Issuer Default Rating (IDR) of Ecuador to CCC from B minus, just three notches above default. The ratings action was taken in the light of “pronouncements by the Ecuadorian authorities expressing a high likelihood that they will seek a debt exchange implying a material loss to bondholders (which would be considered an event of default by Fitch) or will fail to make timely debt service payments in full”, and indicates that Fitch believes “default is a real possibility in the near term”. Last week, Standard & Poor’s lowered Ecuador’s long-term sovereign credit rating to CCC from CCC+ and revised its outlook on the rating to negative from stable.