Ecuador Likely to Seek Settlement: Barclays

Ecuador’s government will likely to try to settle with holders of its defaulted 2012 and 2030 bonds, says Barclays in a report. The shop says it expects the settlement to include a sale of new bonds rather than a buyback. “The government probably already has a strategy for the defaulted bonds, and may launch it as soon as the bondholders of the ‘15s are paid,” it says. Ecuador has said it plans to reveal a restructuring proposal for the 2012s and 2030s after refusing to continue servicing them in December and January. Barclays expects an announcement in the next several weeks. Barclays also says the government has set February 4 as the new date of record for the 2015s, which it has agreed to continue servicing, citing a letter distributed to holders last week. This indicates “that any investors who purchase bonds today [Monday] or later will not be eligible to receive the coupon under normal settlement.”