November 5, 2010   Ecuador under Rafael Correa is still billions in bankrupt, unknowable accounts. Correa’s spend and lie accounts, now married to the Iranean Central Bank and the Chavez Plan for ruination, is claiming a restoration to international markets because the U.S. dollar is weakened by the USA’s Obama team overprinting of dollars to boost oil speculation price hikes. Rafael Correa has done nothing at all to assist growing any portion of Ecuador’s economy except….benefiting from offshore commodity speculators price hikes and from criminal cartel undertakings.

No one should mistake the fact that Ecuador’s value is only slightly better than Venezuela and only slightly better than the failed state of Haiti, itself now blowing in the wind.

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Ecuador's Rating Raised by Fitch on Oil Gain, Growing Access to Financing

By Nathan Gill - Nov 5, 2010        BLOOMBERGS

Ecuador’s credit rating was raised today by Fitch Ratings Ltd., which cited a recovery in international oil prices and improved access to international financing.

Fitch upgraded the South American country’s issuer default rating to B- from CCC with a stable outlook, according to a statement today from the rating company. Fitch also raised the rating on the country’s 9.375 percent bonds maturing in 2015 to B- from CCC and the short-term foreign currency IDR to B from C.

Ecuador’s government is projecting gross domestic product in South America’s seventh-biggest economy will expand 5.1 percent next year, the most since 2008, as public spending rises and oil output recovers from a two-year slump. Ecuador, which forecasts a $3.73 billion budget deficit next year, has defaulted twice on foreign debt in the last 11 years.

“The upgrade to B- reflects the easing of near-term liquidity and financing constraints for Ecuador due to the recovery in international oil prices and increased bilateral lending,” analysts including Erich Arispe wrote in the statement. “Ecuador’s creditworthiness balances moderate levels of public and external debt and the country’s relatively high income and human development levels against demonstrated weak willingness to service debt.”

Domestic Investors

Ecuador, which forecasts oil will average $73.30 a barrel next year, will seek $1.1 billion in loans from domestic investors and $3.86 billion from foreign lenders to cover the budget deficit, according to a copy of the proposed budget on the Finance Ministry’s website.

The government may also sell international bonds for the first time since 2005 next year to finance infrastructure projects, President Rafael Correa said in an Oct. 20 interview with Bloomberg News.

The yield on Ecuador’s 9.375 percent bonds maturing in 2015 was unchanged today at 11.49 percent as of 2:12 p.m. New York time, according to JPMorgan Chase & Co. The yield has risen 48 basis points, or 0.48 percentage point, this year, while the bond’s price has declined one cent to 92 cents on the dollar, according to the bank.

Extra Yield

The extra yield investors demand to hold Ecuadorean dollar bonds instead of U.S. Treasuries narrowed 8 basis points, or 0.08 percentage point, to 10.18 percentage points, according to JPMorgan’s EMBI+ index. Ecuadorean government debt is the second-riskiest after Venezuela’s among 15 emerging markets tracked by JPMorgan.

Standard & Poor’s rates the nation’s debt B-, six levels below investment grade and one level under Argentina. Moody’s rates the debt Caa3, nine steps below investment grade.

Today’s upgrade may also boost foreign investment in Ecuador, which uses the U.S. dollar as its currency, and ease restrictions on corporate credit after the country’s default on $3.2 billion of international debt in 2008, Fernando Simo, chief executive officer at Quito-based brokerage Casa de Valores Produvalores SA, said.

“This is excellent,” Simo, who predicted other rating agencies will probably follow Fitch in upgrading the Andean nation, said in a telephone interview. “This will definitely make international lines of credit reopen and financing providers and investors return to the country.”
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ECrisis is absolutely certain that Quito’s Simo is a joke. No sane investor will return to Quito based on a hollow review by Fitch. Only criminals – like cockroaches- are interested in the criminal Correa conundrum. Fir his part, Correa has done everything to destroy sensible business in Ecuador.

-Pedro Camargo for ECrisis