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Published on 8/28/2020 in the Prospect News Distressed Debt Daily, Prospect News Emerging Markets Daily and Prospect News Liability Management Daily.

Ecuador to settle consent solicitation, exchange offer on Aug. 31

By Sarah Lizee

Olympia, Wash., Aug. 28 – Ecuador announced that the International Monetary Fund (IMF) condition to settle its consent solicitation and invitation to exchange has been satisfied, and settlement is expected to occur on Aug. 31.

The International Monetary Fund announced Aug. 28 that it had reached a staff-level agreement on a new funded program for the republic.

The republic said it is accepting all of the eligible bonds validly tendered under the invitation, as previously reported on Aug. 10.

Ecuador said it expects the GLC opinion condition will be satisfied on the settlement date. All other conditions have been satisfied.

On the settlement date, the new securities, including the new PDI 2030 bond, will be issued in the following amounts:

• $3,701,423,865 of new 2030 bonds;

• $8,458,864,776 of new 2035 bonds;

• $3,403,135,207 of new 2040 bonds; and

• $1,004,941,992 of new PDI 2030 bonds.

The principal amount of the new PDI 2030 bond to be issued for each $1,000 principal amount of eligible bonds of the relevant series is as follows:

• $85.09 for 2022 bonds;

• $55.80 for 2023 bonds;

• $47.24 for 2024 bonds;

• $62.40 for 2025 bonds;

• $59.05 for 2026 bonds;

• $61.42 for 9 5/8% 2027 bonds;

• $64.87 for 8 7/8% 2027 bonds;

• $40.58 for 2028 bonds;

• $53.50 for 2029 bonds; and

• $75.37 for 2030 bonds.

On the settlement date, eligible bonds that were not validly tendered will be modified under the proposed modifications. Among other things, the proposed modifications will provide that each series of eligible bonds will be modified to replicate the maturity and economic terms of the new 2040 bond, without changing the ISIN numbers and without re-issuing new global notes.

In addition, the proposed modifications will include reducing the outstanding principal amount of the applicable eligible bond so that for every $1,000 principal amount originally due, only $911.30 principal amount will remain outstanding.


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