Credit Suisse will buy sovereign bonds from Ecuador that are equivalent to USD 1.630 million. These bonds will be subtracted from Ecuador’s foreign debt.
The European bank Credit Suisse announced on May 4, 2023 that it will buy sovereign bonds of the Ecuadorian State, equivalent to USD 1,630 million, according to a Bloomberg report.
The bank had already announced, on April 26, 2023, that it would invest USD 800 million in the purchase of sovereign bonds from Ecuador, at discounts.
Bonds maturing in 2030 will be purchased at 53.25% of their face or original value.
Instead, the bonds that mature in 2035 will be purchased from holders at 38.5% of their face or original value.
And the bonds that mature in 2040, the bank will buy at 35.5% of their face or original value.
The Government of Guillermo Lasso announced that the bonds purchased by Credit Suisse will be canceled or discounted from Ecuador’s foreign debt.
IDB issues guarantee
The Inter-American Development Bank provided a guarantee to Ecuador to help the country redeem up to USD 800 million of its sovereign bonds, in exchange for promoting the conservation of the Galapagos Islands, says Bloomberg.
The financial guarantee is estimated at USD 85 million, according to a document describing the possible transaction, published on the website of the Washington-based bank.
The objective is to support a new debt instrument, which seeks to reduce the cost and risk of refinancing Ecuador’s sovereign debt.
The IDB surety will be provided along with a political risk guarantee from the United States’ International Development Finance Corporation (DFC), the document details.