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Andean Group - August 2020

Government seals debt restructuring deal

Ecuador’s President Lenín Moreno announced on 3 August the finalisation of a deal with bondholders to restructure some US$17.4bn in sovereign debt. Having initially resisted domestic pressure for such renegotiations, the government’s hand was forced by the escalation of the country’s debt crisis as a result of plunging international oil prices and the coronavirus (Covid-19) pandemic [RA-20-05]. However, while the talks were not without complications, the process was ultimately relatively quick and painless; the real challenge lies ahead, in convincing the country of the merits of this deal.

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