Ecuador is to buy back between $400 million and $650 million, or just over five years' worth, of its global 2012 bond by May next year (it is obliged under its default terms to repurchase at least $125 million every year from 2006). The sovereign wants to lower its debt financing costs and the interest rates on the 2012 are proving costly. If it does buy back $650 million of the bonds, it will save itself $17 million over the next five years. Ecuador will finance the buyback using part of the money raised from its recent international bond issuance together with a loan of $400 million from the Latin American Reserve Fund (FLAR). The government has so far used $257 million of the $650 million raised from the international issuance to make domestic and external debt payments.