When the rhetoric didn’t go away, however, the bonds started to fall – and then Correa’s finance minister, Ricardo Patino, held a disastrous meeting in Quito with Citibank clients, in which he talked openly of offering them perhaps 40% on the dollar in a future restructuring. The price of the bonds fell to the 70s, and the markets braced themselves for a default on February 15, when a $135 million coupon payment was due on the 2030s.
Eventually, Ecuador announced that it would make the coupon payment, but not on time: the $135 million would arrive within the 30-day grace period, which is written into the bond contract. Then, on February 15, the day the coupon was due, the money arrived from Ecuador. Minister Patino, interviewed...
