Ecuador Bondholders Look to Unite

US Bank National Association and law firm Milbank Tweed hope to get holders of Ecuador’s defaulted 2030 to form an ad-hoc committee, following a conference call March 31. Ecuador is expected to reveal in coming weeks a repurchase proposal for its 2030 and 2012 globals, on which it has stopped making interest payments, alleging that the debt was found to be “illegal” and “immoral.” Lazard is advising Ecuador on the buyback. The sovereign has elected to continue paying on its 2015 globals. A Milbank lawyer declines to comment on the issues to be discussed on the call, or what an ad-hoc committee might seek to achieve. Uniting creditors is a challenge in lawsuits against sovereign borrowers, as a majority block is typically needed to take legal action. It is also not certain how much of the 2012 and 2030 issues Ecuador’s government might hold at present. Lawyers on an EMTA panel in New York this month emphasized the difficulty of seeking to attach assets of a foreign sovereign. They say that any legal action would likely come after the sovereign circulates a buyback proposal. US Bank is acting as the trustee.