September 30, 2020 |
In August, when Argentina and Ecuador reached deals with their creditors to restructure billions of dollars worth of foreign law bonds, leaders of both cash-strapped countries were visibly ecstatic. Ecuadorian President Lenín Moreno called it a huge relief. Argentina’s Alberto Fernández broke the social-distancing measures for COVID-19 to hug his economy minister.
There was reason to cheer. Argentina swapped $66 billion and Ecuador $17.4 billion in old debt for new bonds with longer repayment terms, lower interest rates and debt relief. Argentina has a breather on principal payments until 2025; Ecuador until a year after that.
But there’s no time to waste. “The debt restructuring provides an
Debt relief in the midst of a pandemic came as welcomed news to Latin America’s serial defaulters. Even if the pandemic clears, questions linger on their financial outlooks.