NEW YORK -- Ecuador and its foreign creditor banks have reached an agreement in principle to reduce $4.5 billion of medium- and long-term commercial bank debt and $3.1 billion in interest arrears, banks announced Tuesday.
The agreement is one of the last in a series with debtor countries begun in 1988. It will allow creditors to swap their loans to the country for bonds at a 45% discount on principal.
The discount on principal is the highest to date for any Latin country that has reduced its commercial bank debt and the second-highest debt reduction agreed on with debtor countries after Poland.
