Moody's predicts no Ecuador-like default for these LatAm nations

Moody's Investors Service said that although three Latin American nations - Venezuela, Bolivia and Argentina - have political similarities to Ecuador, none appears likely to follow Ecuador's Dec. 12 politically motivated decision to default.

Moody's downgraded Ecuador to Ca from Caa1 on Dec. 16 and concluded that Ecuador declined to make the latest $31 million interest payment on its external debt because of ideological and political reasons having little to do with liquidity and solvency issues.

"Of the three countries that might be prompted to follow Ecuador's lead, only B3-rated Argentina appears to have the political and financial circumstances that could lead to similar action, but we still consider that a very unlikely scenario," Moody's vice president Gabriel Torres said in an agency statement.

"Bolivia is the most politically unstable of the three countries but its debt profile is very different from Ecuador's, as it borrows from different sources, and has already received billions in debt forgiveness from bilateral and multilateral sources.

"The Venezuelan government has never talked of default and has prioritized debt payments, even during the 2002 oil strike that significantly reduced government revenues. Scheduled external debt payments in 2009 are very small, less than $2 billion, and Venezuela has sizable assets abroad that could be endangered in case of default."

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