Update to our September Report

ECUADOR - In Brief 19 Sep 2022 by Magdalena Barreiro

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This afternoon after we released our monthly report for September, President Lasso and Minister of Finance Pablo Arosemena announced the agreement reached with China for a restructuring of the Ecuadorian debt with this country that will bring benefits in debt reduction and cash flow service. The agreement would imply a reduction of $745 million in amortizations of the different tranches of the outstanding debt with China Development Bank between 2022 and 2024, and interest rate reductions that go from 30 bp to 95 bp. Ecuador had pending payments until 2025 with this bank, with the two largest of $744.5m and $503.5m coming in 2023 and 2024 (Table 1). Maturities will be now extended until year 2027. On the other hand, amortizations of debt with Eximbank will be reduced by $680 million between 2022 and 2025, and those maturities will be extended until 2032. However, there are pending payments until 2039 with this bank (Table 1). Total outstanding debt with China as of July 2022 was $4127.94 million, from which payments between 2022 and 2024 sum $3296.58 (79.8%). Thus, the agreement will imply important relief both in amortizations and total debt service (Table 1). Table 1: Balance of Debt with China by Year China Dev. Bank Bank of China Eximbank Total 2022 247.2 19.7 211.3 478 2023 744.55 69.2 439.37 1,253 2024 503.56 69.2 441.27 1,014 2025 35.73 69.2 446.3 551 2026 69.2 189.18 258 2027 69.2 117.14 186 2028 4.09 97.9 102 2029 78.67 79 2030 28.44 28 2031 28.44 28 2032 28.44 28 2033 26.16 26 2034 23.8 24 2035 23.8 24 2036 19.6 20 2037 15.3 15 2038 6.9 7 2039 5.1 5 Total 1,531 370 2,227 4128 Total external debt as of July 2022 was $46,592 million, thus China represented 8.9%...