Take physic, pomp

Studmuffin pays 35%

Ecuador today announced that it would up its haircut offer on the Global 12s and 30s bonds and pay 35c on the dollar instead of its baseline 30c, the news coming after FinMin Viteri had done tea’n’buns with major holders in London and Paris. The press release in English is on this link right here so go look for yourself.

If you’re going to accept the offer you have until June 3rd to deposit your bonds. The big question now is how many holdouts there will be, as the 5% gravy added today (largesse thanks to the recent pop in the price of crude more than a long-term cunning plan, I’d wager) is clearly designed to sway the fence sitters over the The Way Of The Muffin. The number being bandied about Quito today is 90% and if they really get that many the daring holdouts will be left with a long, long wait.

Telling you now, I doff my cap to Studmuffin on this one. If he pulls this off and retires all this debt at a 2/3rds haircut without getting bogged down á la Argentine in the New York courtrooms (as is now likely) he’ll have done a great favour to his country going forward. I had my serious doubts all the way through this but I’ll be happy to eat humble pie.

PS: Here’s a Bloomie report on the 35% news and here’s Felix Salmon with his take.

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