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.

Saturday, December 06, 2008

Ecuador Looking at Possible Ways to Repudiate Debt

By Stephan Kueffner

Dec. 4 (Bloomberg) -- Ecuador’s government is considering various ways of repudiating its debt and will ask for loans from friendly governments like Iran should it lose access to credit markets, the country’s Finance Minister Maria Elsa Viteri said.

“The national government is trying to find all mechanisms not to pay the illegal debt,” Viteri told reporters today at the ministry in Quito. Bondholders have not sought to renegotiate the debt or complained about the process, the minister added.

Ecuador has threatened to default on $3.9 billion in bonds because it says a government-commissioned audit found evidence of criminal violations in connection with its issuance. The government skipped a $30.6 million bond payment on Nov. 15, invoking a 30-day grace period.

The government this week paid a $1.2 million coupon on a Brady bond because it didn’t have the legal right to a grace period, Viteri said.

Ecuador has hired U.S. law firm Foley Hoag to prepare a possible lawsuit to fight the debt in court. The government hasn’t decided whether it would continue to make scheduled payments in the event of a lawsuit, said Policy Minister Ricardo Patino at the same news conference.

Tomorrow, the government will sign a $200 million loan agreement with the Andean Finance Corporation, Viteri said.

The yield on the South American country’s 12 percent bonds due in 2012 fell 1.54 percentage points to 56.92 percent at 12:39 p.m. in New York, according to JPMorgan Chase & Co. The bond’s price climbed 1 cent on the dollar to 32 cents, the highest since Nov. 12.


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