Ecuador: Correa proposes law that may dampen local capital market

New Law Proposed by Correa to dampen capital markets, not permitting bond offerings backed by future sales
Kentucy Fried-chicken sales are not enough to back bonds in Ecuador President Rafael Correa’s local debt market.

bdlive.co.za reported that Mr Correa is proposing legislation that would prohibit the sales of securitised debt if the bond is not backed by a hard asset such as a factory, part of his effort to lift trading and reduce borrowing costs in the nation’s $3.6bn corporate debt market. INT Food Services, the operator of restaurant franchises including KFC and Cinnabon in Ecuador, sold $20m of bonds backed by future cash flows from local restaurants last year, an offering that would be banned if Mr Correa’s bill becomes law. Read Article
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