Ecuador Govt To Pay $30.6M In Debt Coupon Friday As Planned

44 hours, 45 minutes ago

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QUITO (Dow Jones)--Ecuador has ordered the transfer of $30.6 million to pay the coupon on the Global 2012 bonds due Friday, a top Economy Ministry official said Thursday.

The order went out Tuesday, and the country's agent, Citigroup Inc. (C), will have it ready by the the deadline, the official told Dow Jones Newswires.

Friday will mark the fifth coupon payment made by the administration of President Rafael Correa so far this year, despite the president's threats to default on debt he considers illegal or illegitimate, and to default if there isn't enough money to spend on social causes.

The next payment, on the Global 2015 bonds, is due in December.

In his weekly radio address last weekend, Correa said one of the illegitimate loans to be left unpaid is a debt with the World Bank for its services in restructuring Ecuador's mining sector.

"The international bureaucracy comes here to experiment with us, it imposes its projects and on top of that we have to pay them. This type of thing cannot be tolerated," Correa said, adding that debt contracted by dictators also would be considered illegal.

Thanks to high oil prices, the government has had enough money to pay its debts. But analysts worry that problems may arise in the medium term due to increased government spending and costly Social reforms expected to be proposed by the Constituent Assembly elected in September to rewrite the Ecuadorean constitution.

Alberto Acosta, the government's main elected representative to the assembly, and its likely president by virtue of his winning the most votes for the president's party, has said he supports a definition of illegal or illegitimate debt in the constitution.

He also supports including a mechanism to cancel or void certain debt clauses. Among those would be debt contracted by non-democratic governments, debt carrying interest rates beyond market levels or debt contracted amid corruption.

-By Mercedes Alvaro, Dow Jones Newswires; 59-39-9728-653; mercedes.alvaro@dowjones.com

Corrected Nov. 14, 2007 14:38 ET (19:38 GMT)

Corrected Nov. 16, 2007 17:35 ET (22:35 GMT)

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