Ecuador to Honor 2015 Payment

Ecuador’s finance ministry plans to make a $31m coupon payment on its 9.375% global 2015 bond, after using a 1-month grace period to decide on its obligation. The move represents a turnaround from the decision last month to default on its 12% 2012 notes. The government has said it views the 2015’s legality differently than that of the 2012 and 10% 2030 bonds, which a government panel last year determined the country was pressured into issuing at “usurious” rates. The coupon payment for the 2030 bonds is due next month. “Paying ones debt’s when the capacity to do so is well established is a positive development,” says Goldman Sachs. “However, the government’s attempt to default selectively on its commercial bonded debt might turn problematic due to existing pari-passu and cross-default contractual clauses that protect bondholders against attempts at debt service payment discrimination by the issuer,” it adds. Ecuador reiterated plans to buy back up to $3.8bn in the 2012, 2015 and 2030 global bonds at a deep discount, beginning as soon as this month. The government is expected to reveal its buyback and restructuring plans in the coming days, according wire reports citing finance minister Elsa Viteri.