MercoPress. South Atlantic News Agency

Ecuador sovereign bond holders form a committee to begin negotiations

“The Committee is representative of Ecuador’s bondholder base and includes holdings across each series of the Bonds,” the statement said

Holders of Ecuador sovereign bonds have formed a committee to hold talks with the country's government on a potential re-profiling of the country's external debt, the group said in a statement on Thursday.

“The Committee is representative of Ecuador’s bondholder base and includes holdings across each series of the Bonds,” the statement said, though giving no further detail on members.

The group has appointed BroadSpan Capital LLC and UBS Investment Bank as joint financial advisors, it added.

Ecuador has been buckling under its US$ 58 billion debt burden which has been worsened by the coronavirus crisis. President Lenin Moreno said in May the government would renegotiate its debt load, which would save an estimated US$1.3 billion in interest payments.

The central bank of Ecuador said the country’s economy will contract between 7.3% and 9.6% in 2020 due to the coronavirus pandemic, a drop in the price of crude oil and a fall in remittances.

President Lenin Moreno has said state income was likely to drop by $8 billion due to the pandemic, which has hit Ecuador particularly hard.

The central bank had said in January, before the virus outbreak and the plunge in the price of crude, Ecuador's main export, that gross domestic product would likely grow 0.7% this year after a modest expansion of 0.1% in 2019.