Moody's: Ecuador payment consistent

Moody's Investors Service said it said in a new report that Ecuador's announcement that, despite its recent default, it will make good on all debt to a key regional development bank is consistent with the country's support of the bank, the Corporacion Andina de Fomento.

"The recent and historical experience, both in Ecuador and other bank member countries, supports the view that the bank is unlikely to be caught up in any government default," said Moody's vice president Gabriel Torres, author of the report, which examines the possible impact on the bank of Ecuador's Dec. 12 decision to default on selected external debt.

Ecuadorian President Rafael Correa assured lenders on Dec. 20 that Ecuador will pay back many of its loans despite the default, the agency added.

"Despite the drop in oil prices, the decision not to pay a $31million interest payment due on its external debt was a political one as Ecuador has ample financial resources and the payment due was very small since," said Torres. "The government further said it would default on billions of outstanding debt it considers illegitimate."

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