Sovereign haircuts / ECU
Ecuador
13 concluded restructurings, between 1855 and 2020. The earliest default they settle began in 1826. The worst cost creditors 78.4% of the present value of their claim, in 1955. The longest gap between a default and its settlement was 46 years.
Every restructuring
Two measures of the same deals, never combined. The present-value haircut discounts what creditors got against what they were owed; the face-value reduction counts only principal written off.
| Default | Settled | Years to settle | Present-value haircut | Face-value reduction | Debt treated (2020 $) | Source |
|---|---|---|---|---|---|---|
| 1826 | 1855 | 29 | 70.7% | 26.1% | $405M | Meyer, Reinhart and Trebesch (2022) |
| 1868 | 1892 | 24 | 68.2% | 65.9% | $274M | Meyer, Reinhart and Trebesch (2022) |
| 1894 | 1895 | 1 | 55.0% | 1.3% | $105M | Meyer, Reinhart and Trebesch (2022) |
| 1896 | 1897 | 1 | 25.8% | 62.3% | $88M | Meyer, Reinhart and Trebesch (2022) |
| 1907 | 1908 | 1 | 3.4% | 1.0% | $236M | Meyer, Reinhart and Trebesch (2022) |
| 1909 | 1955 | 46 | 78.4% | 71.3% | $56M | Meyer, Reinhart and Trebesch (2022) |
| 1982 | 1983 | 1 | 6.3% | 0.0% | $2.15B | Cruces and Trebesch (2013) |
| 1983 | 1984 | 1 | 5.7% | 0.0% | $749M | Cruces and Trebesch (2013) |
| 1984 | 1985 | 1 | 15.4% | 0.0% | $8.76B | Cruces and Trebesch (2013) |
| 1986 | 1995 | 9 | 42.2% | 16.4% | $11.29B | Cruces and Trebesch (2013) |
| 1999 | 2000 | 1 | 38.3% | 33.9% | $9.71B | Cruces and Trebesch (2013) |
| 2008 | 2009 | 1 | 67.7% | 68.6% | $3.80B | Cruces and Trebesch (2013) |
| 2020 | 2020 | 0 | 41.2% | 15.0% | $18.38B | Authors' Calculations |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Debt treated is the amount restructured, deflated to constant 2020 US dollars in the source file. A negative haircut means the new instruments were worth more than the old claim. Methodology
Bond prices
4 of 13 Ecuador restructuring episodes have Waterloo prices during the restructuring interval
price only, never pbid or pask, and shows one line per bond from one year before default to one year after settlement. The author README defines price as “bond price in GBP and USD”; it does not document normalization to face value. Across all 329 haircut episodes, 111 have no Waterloo country-code match and 177 start after Dec 1, 1980. Those two counts overlap. 7 of 13 episodes start after the panel ends. 2 episodes overlap the panel but still have no non-null price observations in that window.| Bond | Currency | ISIN | Obs. | First | Last |
|---|---|---|---|---|---|
| 4.5-5% Consolidated Bonds of 1891, due 1916 | GBP | not recorded | 48 | Jan 1, 1895 | Dec 1, 1898 |
waterloo_bonds.price only; pbid and pask are not averaged into it. The author README defines price as “bond price in GBP and USD” and does not document face-value normalization. GBP and USD observations use separate labelled panels and y-axes. Of the 329 episodes in the haircut file, 111 have no Waterloo country-code match and 177 start after 1980-12-01; these counts overlap. Later episodes show an absence message rather than an implied zero.Source: Meyer, Reinhart & Trebesch, Sovereign Bonds since Waterloo (bond-price panel) | Harvard Dataverse, Sovereign Bonds since Waterloo Methodology
Default spells
| Spell | From | To | Years | Restructurings |
|---|---|---|---|---|
| ECU_1826-1855 | 1826 | 1855 | 30 | 1 |
| ECU_1868-1897 | 1868 | 1897 | 30 | 3 |
| ECU_1907-1955 | 1907 | 1955 | 49 | 2 |
| ECU_1982-1995 | 1982 | 1995 | 14 | 4 |
| ECU_1999-2000 | 1999 | 2000 | 2 | 1 |
| ECU_2008-2009 | 2008 | 2009 | 2 | 1 |
| ECU_2020-2020 | 2020 | 2020 | 1 | 1 |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Duration counts both endpoints. The spells table also carries a cumulative-haircut column; it is not published here because it does not reconcile with the per-episode haircuts, see the methodology. Methodology
The Cruces-Trebesch record: a third measure and the discount rate
The Cruces-Trebesch file carries 6 restructurings here, and adds the market haircut (the new instruments against the face value of the old claim, undiscounted) and the exit yield used to do the discounting. The deal label is the file’s own and is finer than the country: it names the instrument class the deal covered. The two files were assembled separately, so a deal here need not line up one-to-one with a row above.
| Deal | Date | Present value | Market | Face value | Exit yield | Structure | Data quality |
|---|---|---|---|---|---|---|---|
| Ecuador | 1983-10-01 | 6.3% | 6.3% | 0.0% | 15.7% | - | 2 / 5 |
| Ecuador | 1984-08-01 | 5.7% | 5.7% | 0.0% | 16.6% | - | 2 / 5 |
| Ecuador | 1985-12-01 | 15.4% | 26.7% | 0.0% | 17.0% | - | 2 / 5 |
| Ecuador | 1995-02-01 | 42.2% | 49.4% | 16.4% | 12.9% | Brady deal | 4 / 5 |
| Ecuador | 2000-08-01 | 38.3% | 59.8% | 33.9% | 17.3% | bond exchange | 5 / 5 |
| Ecuador | 2009-06-01 | 67.7% | 68.6% | 68.6% | 13.0% | bond exchange, buyback | 4 / 5 |
Source: Cruces & Trebesch, haircut dataset (2014 update) Data quality is the file's own 1-to-5 index of how well the deal terms are documented. Methodology
Debt still in default
$515.0M across 2 creditor classes in 2024. A haircut can only be measured once a restructuring concludes, so any of this that is still being negotiated is by construction absent from the tables above.
| Creditor class | In default, 2024 |
|---|---|
| Domestic (fiscal) arrears | $463.0M |
| Foreign-currency bonds | $52.0M |
Source: Bank of Canada-Bank of England Sovereign Default Database (CRAG) Bank of Canada terms (attribution). Includes domestic arrears, so it is not comparable with the debt-treated column above. Methodology
Restructurings with Chinese creditors
2 restructurings with Chinese creditors are recorded here. No haircut is attached to any of them, so they cannot be placed on the scale above; the file records only whether face value or the interest rate was cut.
| Year | Type | Creditor | Terms |
|---|---|---|---|
| 2018 | Debt rescheduling only | China Development Bank | Renegotiation of terms under the four party agreement. No details are known, but since renegotiations were led by Ecuador's Hydrocarbon Minister, renegotiations likely affected the Oil Deliveries Agreement (which is an integral part of the loan agreement, see Gelpern et al. 2021) |
| 2020 | Debt rescheduling only | China Development Bank | China Ex-Im Bank | China Development Bank grants Ecuador a new 1-year grace period in August 2020, which allowed for the postponement of $417 million in debt service payments. China Ex-Im Bank defers $474 million in debt service payments falling due between September 2020 and the end of 2021. |
Source: Horn, Reinhart & Trebesch, China's overseas lending and debt restructurings Methodology