Ecuador is stepping up efforts to repurchase its defaulted bonds and pave the way for a new foreign debt sale, offering creditors more than it paid in a 2009 buyback, three people with knowledge of the terms said.
Annual inflation in Ecuador, which uses the U.S. dollar as its official currency, was the fastest in more than two years in October, led by increases in food and services, the National Statistics and Census Institute said.
Ecuador’s President Rafael Correa , who in 2008 called bondholders “true monsters,” is reviewing proposals from banks to sell bonds and is seeking to lure private investors to finance infrastructure and energy.
Ecuador will probably tap the nation’s pension fund and seek a loan from China next year to help finance its estimated $2.7 billion budget deficit, according to Erich Arispe , an analyst at Fitch Ratings.
Ecuador, which defaulted on $3.2 billion of its foreign debt four years ago, is planning to tap global credit markets this year as demand for higher-yielding assets drives down borrowing costs, Standard & Poor’s said.