Ecuador has completed a debt management strategy that involved the repurchase of its 2030 and 2035 sovereign bonds, according to Sariha Moya, Minister of Economy and Finance. Moya provided a technical explanation of the process led by the national government.
The debt operation aimed to improve Ecuador’s debt profile and generate savings on its service costs. The resources from the bond issuance allowed for transparent liability management, eliminating payment default risks and providing liquidity for public works and social services.
The repurchase totaled $3 billion in cash, financed equally: $1.5 billion from freely available borrowing resources and $1.5 billion from a new international bond issue. These funds were used to buy back 2030 and 2035 sovereign bonds.
Because some 2035 bonds were trading below par value, the $3 billion investment enabled Ecuador to retire approximately $3.057 billion in nominal value. This means more debt was bought back than paid for in cash, immediately reducing total debt due to market price discounts.
As a result of this transaction, Ecuador will not have to pay about $698 million in 2026 related to these bonds’ service payments. “This result reflects the real fiscal benefit of the operation, while confirming its central objective: significantly easing short-term liquidity pressure, improving maturity profiles, and strengthening public debt sustainability,” said Moya.
Ecuador achieved one of the lowest spreads between U.S. Treasury rates and its own bond rates compared with previous years. In 2019, Ecuadorian bonds carried an interest rate of 10.75% versus a U.S. Treasury rate of 2.9%, resulting in a spread of 7.8 percentage points; in contrast, the latest issuance saw an interest rate of 8.975% against a U.S Treasury rate of 4.2%, narrowing the spread to 4.7 percentage points.
On January 26th this year—the day Ecuador placed its new sovereign bonds—the final interest rate dropped by 62.5 basis points compared with indicative pricing earlier that day, which had not been seen globally since at least 2020.
Investor demand was high during negotiations on January 26th: offers reached $18 billion—four times more than issued—with participation from over 340 high-quality global investment funds.
According to government data as of October 2025, Ecuador’s public debt-to-GDP ratio stood at 47.76%, down nearly three percentage points from October 2024’s figure of 50.72%. Debt reports are published with a two-month delay due to technical registration processes.
Moody’s upgraded Ecuador’s country rating by two notches in one day—a rare move for an agency that typically increases ratings by only one notch per year.
International investor confidence has increased as economic conditions have improved; investors remain interested in acquiring more Ecuadorian bonds if needed but there are no plans for further issuances this year as financing needs are already met.
Moya noted that when countries can issue external debt it signals strength that can attract foreign direct investment supporting growth domestically; access to external loans also allows local financial institutions to redirect funds toward productive lending such as business or housing credit rather than state financing needs—potentially lowering domestic interest rates.
