Ecuador has completed a debt management strategy that included the buyback of its 2030 and 2035 sovereign bonds, according to Sariha Moya, Minister of Economy and Finance. Moya provided a technical explanation of the process, which was carried out by the national government.
The transaction aimed to improve Ecuador’s debt profile and reduce costs associated with servicing its public debt. The funds used for this operation came from two sources: $1.5 billion from unrestricted borrowing and $1.5 billion from a new international bond issuance, totaling $3 billion in cash. These resources were allocated for the repurchase of the 2030 and 2035 sovereign bonds.
Because some of the 2035 bonds were trading below par value, Ecuador was able to retire approximately $3.057 billion in nominal value using $3 billion in cash. This allowed the state to reduce its outstanding debt stock immediately due to market discounts.
As a result of this buyback, Ecuador will no longer have to pay about $698 million in 2026 related to debt service on these bonds. “This outcome reflects the real fiscal benefit of the operation while confirming its main objective: significantly easing short-term liquidity pressures, improving maturity profiles, and strengthening public debt sustainability,” said Moya.
Moya also noted that Ecuador achieved one of the lowest spreads between U.S. Treasury rates and Ecuadorian bond rates compared with previous issuances:
“Compared with previous bond issues:
– In 2019: Ecuadorian bond interest rate was 10.75%, U.S. Treasury rate was 2.9%, difference was 7.8 percentage points.
– In 2026: Ecuadorian bond interest rate is 8.975%, U.S. Treasury rate is 4.2%, difference is 4.7 percentage points.”
The final interest rate for Ecuador’s latest sovereign bond issue on January 26 dropped by 62.5 basis points compared to indicative pricing earlier that day—a reduction not seen globally since at least 2020.
Investor demand for these bonds reached $18 billion—four times more than what was issued—with participation from over 340 high-quality global investment funds.
Ecuador’s government reports that it has managed public borrowing responsibly; as of October 2025, the country’s debt-to-GDP ratio stood at 47.76%, nearly three percentage points lower than October 2024 (50.72%).
Moody’s upgraded Ecuador’s credit rating by two notches in one day—an unusual move given that such agencies typically increase ratings by one notch per year.
International investor interest remains strong, but there are no current plans for further bond issuances this year as financing needs are already met.
According to Moya: “When a country is able to issue external debt, it also sends a positive signal for attracting more foreign direct investment to support growth.” She added that access to external loans allows local financial institutions to focus more on productive lending rather than allocating resources toward state financing—potentially leading to lower domestic interest rates.
