UPDATE 2-Ecuador seizes moment to print US$1bn bond
By Paul Kilby
NEW YORK, July 25 (IFR) - Ecuador launched a US$1bn five-year bond on Monday, taking advantage of a strong backdrop for LatAm credits to garner much-needed funding for the year.
With books heard reaching US$2bn earlier in the day, the deal gained traction despite concerns about Ecuador's worsening economic conditions and the country's history of defaults.
A rally in EM assets, fueled in part by the buyside's hunt for yield, set the stage nicely for the troubled Andean country, which has been struggling to source financing this year.
"Many of us have been waiting for them to issue as Ecuador is loath to sign on to an IMF program with conditions," said Sarah Glendon, head of sovereign research at hedge fund Gramercy.
Sole lead Citigroup squeezed pricing from talk of 11% area to 10.75% area (+/-1/8), but failed to grind lower amid pushback from accounts scared off by Ecuador's crumbling credit metrics.
The oil exporting country's debt-to-GDP ratio now stands at 35%, close to the government's official debt ceiling of 40%, said Glendon.
"If they get close to that, I am fairly confident that authorities will brush the debt limit by the wayside," she said. Continuación...