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Fitch lifts Ecuador
Fitch Ratings said it upgraded Ecuador's long-term foreign-currency issuer default rating to CCC from RD (restricted default), global uncollateralized foreign-currency bonds due 2015 to CCC from CC, collateralized foreign-currency par and discount Brady bonds to B- from CCC- and short-term foreign-currency issuer default rating to C from D.
The country ceiling is affirmed at B-, and the individual ratings for the global uncollateralized foreign-currency bonds due 2012 and 2030 are affirmed at D and simultaneously withdrawn.
The restricted default rating was assigned when Ecuador announced that it would stop servicing a portion of its external bond debt in December 2008.
On June 11, the government bought back 81.3% of the bonds due 2012s and 92.8% of the bonds due 2030 through a reverse Dutch auction.
Despite the debt reduction, Fitch said Ecuador's CCC long-term foreign-currency issuer default rating reflects the real possibility of default over the forecast period due to the sovereign's fragile payment capacity and demonstrated weak willingness to service debt.
Ecuador's payment capacity has deteriorated further as a result of its heavy reliance on oil revenues, limited financing sources, low external liquidity and an inconsistent macroeconomic policy framework, the agency added.
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