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Ecuador Debt Swaps Set to Pay $60 Million After Coupon Delay

  • Payout set at 65% in auction to settle credit-default swaps
  • Swaps triggered after nation reached deal to suspend payments
Pedestrians walk past the closed San Francisco Church on Palm Sunday in Quito, Ecuador.
Pedestrians walk past the closed San Francisco Church on Palm Sunday in Quito, Ecuador.Photographer: Johis Alarcon/Bloomberg
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Investors holding debt protection for Ecuador are in line to share compensation of about $60 million after the South American nation struck a deal with creditors to suspend coupon payments on its foreign debt.

Firms holding the country’s credit-default swaps will receive about 65% of the amount covered by the instruments, according to the final results of an auction to settle the contracts on Tuesday. They get triggered when a borrower fails to pay its debt. Investors use the instruments to make negative bets on borrowers or as hedges for bond investments.