NEW YORK, July 7, 2020 /PRNewswire/ — The Ad Hoc Ecuador Bondholder Group (the “Ad Hoc Group”) is pleased to confirm it has reached an agreement in principle with the Republic of Ecuador (“Ecuador“) on the commercial terms for the restructuring of all ten series of Ecuador’s c.$17.4 billion in outstanding sovereign bonds. The Ad Hoc Group comprises major institutional holders of Ecuador’s external sovereign debt including, among others, funds managed or advised by AllianceBernstein, Ashmore Investment Management Limited and Ashmore Investment Advisors Limited, BlackRock Financial Management, Inc. and its affiliates, BlueBay Asset Management LLP, and Wellington Management Company LLP. The Ad Hoc Group is supported by its international legal counsel, White & Case LLP. Funds managed or advised by members of the Ad Hoc Group holding approximately 45% of Ecuador’s outstanding bonds are supportive of the agreement in principle, and additional support from group members is expected in the coming days as internal processes are completed.
The agreement in principle will provide Ecuador with significant, front-loaded debt relief in the coming years to help the country recover from the COVID crisis. It will also make a substantial contribution to ensuring the sustainability of Ecuador’s external debt in the medium term, paving the way for the country to achieve strong, sustainable, and inclusive economic growth.
The formal launch of the restructuring process is expected to occur in the coming weeks, subject to agreement on definitive documentation and the preparation of an Invitation Memorandum by Ecuador.
The Ad Hoc Group is particularly gratified that following a collaborative and productive negotiation process, a consensus on the best way forward for Ecuador and its creditors has been found within a matter of weeks. The current restructuring process sets an important precedent for post-COVID emerging market sovereign debt resolutions, and demonstrates how a debtor-creditor relationship founded on principles of good faith and mutual understanding can lead to a positive outcome for all parties.
Contact: Erin Hershkowitz, +1 646 885 2200, [email protected]
SOURCE White & Case