Ecuador agrees with bondholders on a due date deferral of interest payments
17 Apr, 2020, 19:23 ET
QUITO, Ecuador, April 17, 2020 /PRNewswire/ -- The Republic of Ecuador ("Ecuador") has succeeded in reaching the thresholds for the consent solicitations launched on April 8th for the deferral of a total of US$811 million of interest payments due on its outstanding Eurobonds between March 27, 2020 and July 15th, 2020 to August 15th, 2020.
Holders of more than 91% of the aggregate principal amount of the bonds due 2022, 2023, 2025, 2026, 2027, 2028, 2029 and 2030, and holders of more than 82% of the aggregate principal amount of the bonds due 2024, included in the consent solicitations, gave their consent to Ecuador's proposal.
The interest deferral obtained by Ecuador will allow the authorities to engage in orderly discussions with bondholders aimed at providing the country with the necessary relief for the economy to recover from the COVID 19 health crisis and the collapse in the price of oil.
"We are pleased with the outcome. It shows the clear benefits of constructive proactive engagement with creditors, the vast majority of whom have demonstrated an understanding of the crisis facing Ecuador. The country conducted an orderly and voluntary process that provides the country essential temporary relief, and is a first step towards improving the profile of Ecuador's debt. Our approach, which stayed within the framework of our contracts and market practices, was well received by the investor community and multilateral organizations. We look forward to continuing the process on that basis." Minister Martinez said.
The authorities will use the relief provided by the deferral of interest payments to focus on dealing with the humanitarian and health crisis caused by COVID-19 while continuing discussions with the International Monetary Fund aimed at securing a successor program and finalize ongoing discussions with Ecuador's bilateral financing partners. The Republic also intends to engage in discussions with bondholders on improving its debt profile as soon as practicable.
SOURCE The Republic of Ecuador
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