Ecuador reached a staff-level agreement with the IMF for a four year loan amounting to $4bn. The agreement still needs to be approved by the IMF board, however, it will help provide liquidity to Ecuador in the event of a worse crisis. The deal is designed to help the nation avoid default on its $16bn outstanding debt. The previous $7.5bn deal with the IMF which ended in December 2022 helped the nation in its first debt restructuring in over two decades. Ecuador’s bonds have been on the rise since the start of the year, returning almost 60% YTD, in anticipation of the nation reaching a deal with the IMF.
Ecuador’s bonds traded broadly stable with its 3.5% 2035s at 54.2 cents on the dollar, yielding 10.55%
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