Successful Outcome for Liability Management

ECUADOR - In Brief 17 Jun 2019 by Magdalena Barreiro

The Ministry of Finance confirmed that the liability management operation that took place last week through which Ecuador issued $1125 million in bonds maturing in 2029 with a coupon of 10.75% and a yield of 9.059%, received a positive response from bondholders of sovereign bonds maturing in 2020.The Republic was able to purchase $1175.37 million which represents 78.3% of the abovmentioned issue. Albeit the new issue does not reduce average interest payments, the operation provides a significant relief for next year´s financing plan as the government will have to raise only the remaining $375 million to pay the nominal value of the 2020´s. Given the premium offered to bondholders of the 2020 issue, the operation results in a reduction of $50.37million of the current external debt stock.

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