Ecuador: Recent Bond Issue

blogs.reuters.com reported….Analysts at risk consultancy Eurasia Group warn investors not to be misled by Ecuador’s recent conciliatory moves, which it says are motivated by necessity rather than any ideology shift. The government has a $4.9 billion deficit this year, and public spending is over 40 percent of GDP. They write:”Though Correa is currently on a charm offensive with potential creditors, he is prone to ad-hoc policymaking and is highly mercurial, so his commitment to a more conciliatory stance should not be overestimated.”

On the positive side though, Ecuador is promising to repay the $650 million in bonds that fall due next year. If it does manage to do that, it will become a truly successful market participant as per S&P’s yardstick. Read Article

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