The operation to repurchase expensive bonds to exchange them for blue bonds reduced the country risk to 1,623 points. This in the midst of growing political instability.
The Minister of Economy and Finance, Pablo Arosemena, has confirmed that the exchange of expensive bonds for blue bonds not only reduces the stock of public debt by more than 5%; it will also represent savings in payments of around $1,121 million over 18 years.
This does not solve the country’s debt service problems, which will deepen from 2026; but it represents an important relief that has been taken positively by the international markets.
Thus, from May 4, 2023, when the first news about the success of the exchange operation came out, until yesterday, May 9, 2023, Ecuador’s country risk was reduced from 1,806 to 1,623 points; that is, 183 points less.
The transaction has been cataloged as the largest debt swap for the preservation of nature that has been registered on a global scale; it would also bring around $425 million for the conservation of the Galapagos Islands.
However, there is a high possibility that the reduction in country risk will be diluted very soon given the worsening of instability and uncertainty about the outcome of the impeachment trial against President Lasso. (JS)