Friday, December 12, 2008

Ecuador Goes into Default

One after the other... Iceland, Argentina, now Ecuador. This will continue to place stress on all debt world wide...

Ecuador Defaults on Bonds, Seeks Restructuring

By Stephan Kueffner

Dec. 12 (Bloomberg) -- Ecuador won’t make a $30.6 million bond interest payment due Dec. 15, putting the country in default for a second time this decade, President Rafael Correa said.

“The country is in default,” Correa told reporters in his office in Guayaquil. He said the government will seek a restructuring with bondholders.

By defaulting, Correa, 45, fulfills a threat he made during his 2006 presidential campaign and reiterated throughout the first two years of his term. His decision comes as a deepening global economic slump throttles demand for oil, the country’s biggest export. Ecuador, which defaulted in 1999, owes about $10 billion to bondholders, multilateral lenders and other countries.

“Ecuador is moving further into isolation,” said Vicente Albornoz, head of the Cordes research institute in Quito. “The hardliners in the government won.”

To contact the reporter on this story: Stephan Kueffner in Quito at

Last Updated: December 12, 2008 14:33 EST