A return to the markets
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A return to the markets

Selling a sovereign bond deal:
Ecuador's president Lucio Gutiérrez
has taken a personal hand in
interesting investment banks in a
bond issue and bond restructuring

With two presidents overthrown by popular unrest since 1997 and a debt default in 1999, politically volatile Ecuador has largely been exiled from international capital markets in recent years, unable to tap into investor demand for high-yielding emerging-market paper.

That looks set to change this month, when the Andean nation plans to issue its first new debt since it defaulted six years ago. It will also swap its 2012 global bonds for new paper that will cost less to service.

Finance minister Mauricio Yépez hopes Ecuador can sell about $300 million in five-year sovereign bonds and at the same time hold a voluntary swap of $1.25 billion for bonds with a lower rate than the 12% interest charged on the 2012 globals. Ecuador's president, Lucio Gutiérrez, went to New York in January to try to sell the deal to fund managers. While Deutsche Bank and JPMorgan are expected to handle the issue, investment banks have until February 14 to submit their offers to the government.

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