QUITO, April 19 (Reuters) - Ecuador will offer investors of its defaulted debt a buyback with a "big discount" on its nominal value, President Rafael Correa said on Sunday.
Ecuador plans to reveal its debt restructuring proposal on Monday, more than four months after the leftist Correa refused to pay $3.2 billion in 2012 and 2030 global bonds over charges the debt was "illegally" issued by past administrations.
"The proposal is basically to try to buy back that debt at a big discount," Correa said during a television interview. "The source of the debt's illegitimacy was its overvalue when it was renegotiated in 2000 at a time (when) our country was in shambles."
Correa, a former economy minister whose presidential campaign slogan was "life before debt," has said his government could seek a buyback at a price similar to the market value of the defaulted debt when it was restructured in 2000.
Correa said the global bonds, which were issued as part of the 2000 renegotiation, were valued at around 20 cents on the dollar at that time when a crippling financial crisis forced Ecuador to default on its foreign debt.
Even as Ecuador's revenue plummets on lower oil exports, the U.S.-trained economist has said the OPEC-member nation has enough funds to buy back the defaulted debt.
Local media has speculated his socialist government silently bought back a large percentage of the debt when Correa threatened to default in November. If Ecuador controls a great part of the debt the cost of a buyback will be much lower.
The debt restructuring plan also comes only days before Ecuadoreans decide whether to re-elect Correa in general elections. Some analysts say Correa will seek big concessions from bondholders in the restructuring to boost his popularity before the April 26 vote.
The debt default has shutdown international credit lines to Ecuador and its private businesses at a time when the government is scrambling to cover a widening fiscal deficit this year.
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