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Showing posts from February, 2015

Bondholder Love for Ecuador’s Correa Is Questioned: Andes Credit

By Nathan Gill (Bloomberg) -- President Rafael Correa’s resourcefulness in the face of sinking oil prices has made Ecuador a favorite among emerging-market bond investors this year.
To AllianceBernstein and Capital Economics, Correa needs to do more to ensure that the goodwill doesn’t prove fleeting.
The nation’s debt securities returned 4.9 percent as Correa said he’d cut spending for the first time since taking power in 2007 and lined up more than $7.5 billion in loans from China. That gain, the biggest in emerging markets behind Belize, is a sign of investor confidence in the OPEC nation’s ability to weather a 53 percent plunge in crude prices since June.
But with Ecuador needing a record $10.5 billion to cover its total financing needs this year, Correa can’t afford to rest on his laurels, said Marco Santamaria, a money manager at AllianceBernstein, which oversees about $27 billion in emerging-market debt. While Ecuador’s borrowing costs have tumbled from a four-year high in Dece…