Ecuador launches $4 billion in new debt, says holders tendered $4.6 billion in related buyback

By Rodrigo Campos and Karin Strohecker

NEW YORK/LONDON, Jan 26 (Reuters) - Ecuador launched on Monday a $4 billion international debt sale after investors tendered some $4.6 billion of notes in a related debt buyback operation.

The South American country issued $2.2 billion of bonds maturing in 2034 at a yield of 8.75%, and $1.8 billion of bonds due in 2039 at a yield of 9.25%, marking its first return to international capital markets since restructuring its eurobond debt in 2020. The deal, which drew $18 billion of orders according to the government, is being run by Bank of America and Citi.

“Our return to the markets is not a one-off event, but marks the beginning of a renewed, transparent and long-term relationship with investors,” said Economy and Finance Minister Sariha Moya in a statement.

“The quality and strength of investor demand was very robust,” she added. “Feedback throughout the process underscored strong confidence in our economic program.”

The government said it was Ecuador’s largest bond deal ever and achieved the country’s lowest spread to U.S. Treasuries.

Ecuador’s sovereign debt was among the best-performing in emerging markets last year, according to JPMorgan’s EMBIGD index, with current issues yielding between 7% and 9.1%, according to LSEG data.

Separately, the government said it received tenders of $2.48 billion, or 81.6%, of its 2030 step-up notes and $2.12 billion, or 32.7%, of its 2035 step-up notes in the buyback offer.

Ecuador said it will announce on January 27 how much it will spend on each series and whether any bids will be prorated, with the buyback still conditional on the closing of the new bond issuance.