The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Monday, March 19, 2007

Ecuador eyes Argentine-style debt swap-report

BUENOS AIRES, March 18 (Reuters) - Ecuador does not rule out a debt restructuring along the lines of Argentina's 2005 swap, which offered creditors about 25 cents on the dollar, Ecuadorean President Rafael Correa told leading Argentine daily Clarin in an interview published on Sunday.
Argentina restructured some $100 billion in defaulted sovereign debt in early 2005, in a swap that involved a steep haircut and extended debt maturities. About three-quarters of bondholders agreed to the terms.
"We would like to renegotiate the external debt as Argentina did, but it's quite difficult to do that now, because Argentina took advantage of its tragedy to renegotiate when bond prices had fallen," Correa was quoted as saying.
Argentina defaulted on its debt at the height of an unprecedented economic crisis in 2002, a year in which the economy shrank nearly 11 percent and the peso currency sharply depreciated.
A U.S-educated economist and friend of U.S. foe Venezuelan President Hugo Chavez, Correa said he preferred not to discuss his country's restructuring plan, but said he consulted with officials at Argentina's Economy Ministry on a regular basis.
Asked if he could rule out an Argentine-style debt deal, Correa responded: "No, it has not been ruled out. The debt is a heavy burden and we are going to be tough renegotiating it."
Last week, Correa told reporters he would repay foreign debt only if the country could afford it and reiterated that a default was not inconceivable. He also said the country would soon identify which debts were "illegitimate."
Ecuador's president has rattled Wall Street with promises to limit foreign debt payments. Correa made the payment on a foreign debt coupon that came due in February, but has left investors guessing over whether he will settle the next, due in May.

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