Global Macro Service > Research Briefings > Ecuador

Preliminary debt deal promises to restore sustainability

The July 7 restructuring deal between Ecuador’s government and major bondholders would provide sufficient medium-term debt relief and restore long-term debt sustainability. It implies a net present value (NPV) haircut of 50.2%, assuming an exit yield of 12%, a slightly smaller NPV haircut than we had expected (52%). It must be approved by more than two-thirds of bondholders.

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