Ecuador Buyback Deadline Passes

The deadline for holders of Ecuador’s defaulted 2012 and 2030 bonds to submit bids in a buyback auction passed Friday, with investors and analysts expecting strong participation. Attempts at organizing resistance failed to gain traction, a bondholder tells LatinFinance, and the prospect of getting 30-plus cents on the dollar may outweigh the cost and uncertainty of legal action. “Expect a large size participation of around 80%-90%, probably skewed towards 90% on limited amount of holdouts,” says Siobhan Morden, LatAm debt strategist at RBS. That the tender deadline has come and passed without bondholders accelerating the 2030, she says, suggests the holdout percentage is likely low. Morden expects the deal to be weighted towards the minimum clearing price (30) for the core participation of the government bonds with a final price probably close to 32-34. The government plans to announce the results of the buyback on or around May 26. Ecuador’s 2012s and 2030s traded at 30 Friday, according to the Guayaquil bolsa.