Fitch upgrades Ecuador

Fitch Ratings said it upgraded Ecuador's long-term foreign-currency issuer default rating to B- from RD, and assigned ratings of B- to the new securities issued as part of a bond exchange.

The upgrade to B- reflects the completion of a distressed debt exchange Fitch considers to have cured the default started by the April consent solicitation, the agency said.

“Despite deep economic challenges and political uncertainty, the DDE has helped support near-term repayment capacity both by greatly reducing near-term debt service and paving the way for a new 27-month $6.5 billion Extended Fund Facility (EFF) with the IMF. Fitch expects any government will have incentives to honor the debt deal following upcoming elections in 2021, but election risks pose significant uncertainty around commitments under the EFF and appetite for reforms and fiscal adjustment,” Fitch said in a press release.

The outlook is stable.

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