Ecuador Looking at Possible Ways to Repudiate Debt

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. 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, Bloomberg reported. 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. On Friday, the government will sign a $200 million loan agreement with the Andean Finance Corporation, Viteri said. Read more.