Investor Presentation Republic of Ecuador 13 April 2020 1 - - PowerPoint PPT Presentation

investor presentation republic of ecuador
SMART_READER_LITE
LIVE PREVIEW

Investor Presentation Republic of Ecuador 13 April 2020 1 - - PowerPoint PPT Presentation

Investor Presentation Republic of Ecuador 13 April 2020 1 Disclaimer THIS PRESENTATION IS SOLELY FOR USE AT THIS MEETING, IS PROVIDED FOR INFORMATION PURPOSES ONLY, AND IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR


slide-1
SLIDE 1

1

Investor Presentation Republic of Ecuador

13 April 2020

slide-2
SLIDE 2

THIS PRESENTATION IS SOLELY FOR USE AT THIS MEETING, IS PROVIDED FOR INFORMATION PURPOSES ONLY, AND IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OR RELATED FINANCIAL INSTRUMENTS OR AN INDUCEMENT TO ENTER INTO INVESTMENT ACTIVITY AND SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE. THIS PRESENTATION DOES NOT CONTAIN ALL THE INFORMATION THAT IS MATERIAL TO AN INVESTOR OR FOR AN INVESTMENT DECISION, INCLUDING ANY DECISION WITH RESPECT TO THE CONSENT SOLICITATION, AND HAS NO REGARD TO THE SPECIFIC INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY RECIPIENT. NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, IS PROVIDED IN RELATION TO THE ACCURACY, COMPLETENESS OR RELIABILITY OF THE INFORMATION CONTAINED HEREIN. NO PART OF THIS PRESENTATION, NOR ITS USE, SHOULD FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT OR INVESTMENT DECISION, INCLUDING WITH RESPECT TO THE CONSENT SOLICITATION. YOU ARE ADVISED TO OBTAIN A COPY OF THE CONSENT SOLICITATION STATEMENT FOR MORE COMPLETE INFORMATION ABOUT THE CONSENT SOLICITATION, AND TO CAREFULLY REVIEW THE INFORMATION CONTAINED THEREIN BEFORE MAKING ANY DECISION WITH RESPECT TO THE CONSENT SOLICITATION. THIS PRESENTATION IS NOT FINANCIAL, LEGAL, TAX, REGULATORY OR OTHER ADVICE. YOU SHOULD CONSULT YOUR OWN LEGAL, REGULATORY, TAX, BUSINESS, INVESTMENT, FINANCIAL AND ACCOUNTING ADVISERS TO THE EXTENT THAT YOU DEEM NECESSARY, AND YOU MUST MAKE YOUR OWN DECISION REGARDING THE CONSENT SOLICITATION AND THE REPUBLIC BASED UPON YOUR OWN JUDGMENT AND ADVICE FROM SUCH ADVISERS, AS YOU DEEM NECESSARY, AND NOT UPON ANY VIEWS EXPRESSED HEREIN. BY ATTENDING THE MEETING OR BY READING THE PRESENTATION SLIDES YOU AGREE AS FOLLOWS: THIS PRESENTATION HAS BEEN PREPARED BY OR ON BEHALF OF THE REPUBLIC, IS CONFIDENTIAL AND DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER OR INVITATION TO SUBSCRIBE FOR, UNDERWRITE, TO PURCHASE, OR OTHERWISE ACQUIRE, OR A RECOMMENDATION REGARDING, ANY SECURITIES OF THE REPUBLIC NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION, INCLUDING WITH RESPECT TO THE CONSENT SOLICITATION. THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL, AND NO PART OF IT OR ITS SUBJECT MATTER MAY BE COPIED, REPRODUCED, REDISTRIBUTED, PASSED ON, OR THE CONTENTS OTHERWISE DIVULGED, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON, OR PUBLISHED IN WHOLE OR IN PART FOR ANY PURPOSE WITHOUT THE PRIOR WRITTEN CONSENT OF THE REPUBLIC. IF THIS PRESENTATION HAS BEEN RECEIVED IN ERROR, IT MUST BE RETURNED IMMEDIATELY TO THE REPUBLIC. THIS PRESENTATION IS NOT DIRECTED TO, OR INTENDED FOR DISTRIBUTION TO OR USE BY ANY PERSON OR ENTITY THAT IS A CITIZEN OR RESIDENT OR LOCATED IN ANY LOCALITY, STATE, COUNTRY OR JURISDICTION WHERE SUCH DISTRIBUTION, PUBLICATION, AVAILABILITY OR USE WOULD BE CONTRARY TO LAW OR REGULATION OR WHICH WOULD REQUIRE ANY REGISTRATION OR LICENSING WITHIN SUCH JURISDICTION. THIS PRESENTATION IS ONLY BEING PROVIDED TO PERSONS THAT ARE (I) “QUALIFIED INSTITUTIONAL BUYERS" (QIBS) AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT") OR (II) PERSONS THAT ARE NOT U.S. PERSONS AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT. BY ACCEPTING DELIVERY OF THIS PRESENTATION THE RECIPIENT WARRANTS AND ACKNOWLEDGES THAT IT FALLS WITHIN THE CATEGORY OF PERSONS UNDER (I) OR (II) ABOVE. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. THIS PRESENTATION MAY CONTAIN FORWARD-LOOKING STATEMENTS. THE WORDS “BELIEVE,” “EXPECT,” “ANTICIPATE,” “INTEND,” “PLAN,”“ ESTIMATE,” “EXPECT,” “PROJECT,” “FORECAST,” “WILL,” “SHOULD,” AND “MAY” AND SIMILAR EXPRESSIONS AS WELL AS STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDING, WITHOUT LIMITATION, THOSE REGARDING FINANCIAL POSITION, STRATEGY, PLANS AND OBJECTIVES OF THE REPUBLIC FOR FUTURE ACTION (INCLUDING FINANCING AND DEBT MANAGEMENT PLANS AND OBJECTIVES) IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS WHICH MAY AFFECT THE REPUBLIC'S ABILITY TO IMPLEMENT AND ACHIEVE THE ECONOMIC AND MONETARY POLICIES, FINANCING PLANS, BUDGETARY PLANS, FISCAL GUIDELINES AND OTHER BENCHMARKS SET OUT IN SUCH FORWARD-LOOKING STATEMENTS AND WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC’S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. FURTHERMORE, CERTAIN FORWARD- LOOKING STATEMENTS ARE BASED ON ASSUMPTIONS OR FUTURE EVENTS WHICH MAY NOT PROVE TO BE ACCURATE. THE FORWARD-LOOKING STATEMENTS IN THIS PRESENTATION SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION AND THE REPUBLIC EXPRESSLY DISCLAIMS TO THE FULLEST EXTENT PERMITTED BY LAW ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. NOTHING IN THE FOREGOING IS INTENDED OR SHALL EXCLUDE ANY LIABILITY FOR, OR REMEDY IN RESPECT OF, FRAUDULENT MISREPRESENTATION. THE INFORMATION IN THIS PRESENTATION HAS NOT BEEN INDEPENDENTLY VERIFIED. NO REPRESENTATION, WARRANTY OR UNDERTAKING, EXPRESS OR IMPLIED, IS MADE AS TO THE FAIRNESS, ACCURACY OR COMPLETENESS OF THE PRESENTATION AND THE INFORMATION CONTAINED HEREIN AND NO RELIANCE SHOULD BE PLACED ON IT. INFORMATION (INCLUDING MARKET DATA AND STATISTICAL INFORMATION) HAS BEEN OBTAINED FROM VARIOUS PUBLIC SOURCES. ALL PROJECTIONS, VALUATIONS AND STATISTICAL ANALYSES ARE PROVIDED TO ASSIST THE RECIPIENT IN THE EVALUATION OF MATTERS DESCRIBED HEREIN. THEY MAY BE BASED ON SUBJECTIVE ASSESSMENTS AND ASSUMPTIONS AND MAY USE ONE AMONG ALTERNATIVE METHODOLOGIES THAT PRODUCE DIFFERENT RESULTS AND, TO THE EXTENT THEY ARE BASED ON HISTORICAL INFORMATION, THEY SHOULD NOT BE RELIED UPON AS AN ACCURATE PREDICTION OF FUTURE PERFORMANCE. NONE OF THE REPUBLIC, ITS ADVISERS, REPRESENTATIVES, CONNECTED PERSONS, THE CONSENT SOLICITATION AGENT OR ANY OTHER PERSON ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM THIS PRESENTATION OR ITS CONTENTS. THE INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE.

Disclaimer

1

slide-3
SLIDE 3

Table of Contents

I Mac acroeconomic Updat ate 4 II II Focus on Debt Man anag agement 17 III III Ne Next S t Steps 23

2

slide-4
SLIDE 4

I Macroeconomic Update

1

slide-5
SLIDE 5

The current administration has accomplished significant fiscal consolidation

Despite inheriting a a difficult finan ancial al situat ation, the current ad administrat ation has as sought to implement fiscal al consolidat ation and nd prudent fiscal al man anag agement throughout 2017, 2018 an and 2019

  • These efforts have been implemented mainly through a contraction of capital expenditures, a reduction of 5% in civil service wages in 2019

and fuel subsidy reforms enacted in early 2019 (those enacted in late 2019 were subsequently rolled back) Overall Balance of the Non-Financial Public Sector (% of GDP)

  • 4,6
  • 5,4
  • 6,1
  • 8,2
  • 4,5
  • 3,1
  • 2,8

2013 2014 2015 2016 2017 2018 2019

  • 6.0%

Start of the IMF Program EFF

  • 3.5%

Previous Administration Current Administration

Source: Ministry of Economy and Finance, Republic of Ecuador

4

slide-6
SLIDE 6

‒ Efficient Public Procurement ‒ Anti-Corruption Law ‒ Anti-Bribery Policies ‒ Business Confidence ‒ Productive Development Law ‒ Employment Promotion Law ‒ Tax Simplicity and Progressivity Law ‒ Economic Reactivation Promotion of Ecuador Law ‒ Bono de Desarollo Humano ‒ Plan Toda una Vida ‒ Bono Social Soberano

The current administration has made important progress in economic reforms

1. 1. Fiscal al consolidat ation an and monetar ary stab ability 2. 2. Equal al opportunities an and social al pr protecti tion 3. 3. Job creat ation an and development of a a productive eco econo nomy 4. 4. Efficient an and tran anspar arent man anag agement of resources

4 PILLARS OF THE PROSPERITY PLAN

  • Fiscal Consolidation: Overall balance of the non-financial public sector improving from -8.2% of GDP in 2016 to -2.8% of GDP in 2019
  • Stable FX Reserves at around US$ 3.5bn (before external shocks)
  • Non-financial public sector deficit reduction of 5% in 2019 (from US$ 9.7bn projected to US$ 9.2bn)
  • US$ 1.1bn social investment, 150k additional beneficiaries in the Bono de

Desarrollo Humano and 150k additional in Plan Toda una Vida

  • First country in the world to issue a sovereign social bond for housing purposes

(helping 24k people achieve access to decent housing)

  • The business confidence index increased from 1,365 to 1,474 points in 2019
  • Elimination of the Income Tax advance
  • Elimination of 100k retention agents
  • Simplified tariffs procedures for exporters
  • Elimination of the minimum tax, tax exemptions for new investments, elimination of

the windfall tax

  • US$ 900m in procurement savings from 2018 to 2019
  • Certified in ISO 37001 (anti-bribery management systems)
  • Transparency International improved its ranking of Ecuador from 120th in 2016 to

93rd in 2019 (global index) and 4th in South America

5

slide-7
SLIDE 7

However, two major external shocks have caused Ecuador’s economic prospects to deteriorate severely

CO COVID-19 C 19 Cri risis 1 Oi Oil Price ce Sho Shock ck 2

6

slide-8
SLIDE 8

689 406 340 242 233 226 214 179 142 124 200 400 600 800

Panama Ecuador Chile Dominican Republic Barbados Saint Kitts and Nevis Antigua and Barbuda Peru Uruguay Grenada

The COVID-19 health crisis is putting pressure on Ecuador’s economy and public finances

CO COVID-19 cau aused a a precipitous fal all in both domestic an and global al deman and, dam amag aging Ecuad ador’s economy. An emergency response pac ackag age followed by ad additional al resources will be necessar ary to sav ave an and reac activat ate the economy

1

Source: Worldometer COVID-19 data as of 11 April 2020

Impact of COVID-19 health crisis on Latin America countries

Confirmed cases per million people

Ecuador’s response to the crisis

  • An initial

al US$ 3.9bn fiscal al pac ackag age has as been ap approved in re response to the COVID-19 outbreak ak

  • Ecuador will allocate a US$ 0.7bn emergency package in

response to the COVID-19 outbreak:

  • US$ 0.3bn in Medical Expenditures (healthcare

equipment, pharmaceuticals, tests…)

  • US$ 0.4bn in Food and Health Assistance (est.

cost for 2-3 months)

  • Ecuador will also allocate a US$ 3.2bn facility to provide

economic and social assistance to workers and companies

  • On 10 April 2020, the President an

announced a a series of ad additional al meas asures to tac ackle the COVID-19 19 crisis 7

slide-9
SLIDE 9

The collapse of oil prices and recent severe production cuts due to force majeure particularly affect government revenues

2

WTI and Ecuador Mix market prices have fallen c. 65% since the beginning of the year

Price, in US$/bbl

Ecuador’s net oil revenues are expected to decrease in 2020 as a result of depressed oil demand and the fall in oil prices

Net oil revenues estimates, US$ bn 10 20 30 40 50 60 70 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

Título del eje Título del eje

WTI Ecuador Mix 8,2 8,4 8,2 8,6 4,1 4,4 4,8 5,4 2020 2021 2022 2023 As of December 2019 As of April 2020 30.1

Oil price Ecuador Mix (US$ per barrel)

32.0 34.6 36.5

Source: Petroecuador (as of 7 April 2020); Ecuador Mix is a 60-40 mix of Oriente and Napo

The sudden fal all in oil prices has as par articular arly af affected Ecuad ador, considering the country’s relian ance on oil receipts: in 2019, gr gros

  • ss oi
  • il r

rev evenues enues represented c.37% of budget revenues an and c. 39% of exports. Moreover, the temporar ary hal alt in operat ations of Ecuad ador’s two crude oi

  • il

l pip ipelin lines due to a a lan andslide has as led to a a temporar ary cut in production from over 500,000 bpd to 65,000 bpd over the next 4-5 5 weeks, pu putting fu furth ther pr pressure on oil revenues

Note: Estimates of future oil revenues are based upon data prepared in consultation with the IMF. Such estimates are based on numerous assumptions regarding the Republic’s present and future policies and plans and the environment in which the Republic will operate in the future. These estimates speak only as of the date of this presentation . Source: Ministry of Economy and Finance, Republic of Ecuador as of April 13, 2020

8

slide-10
SLIDE 10

3.282 3.973 3.488 4.084 4.095 3.772 3.808 5.130 4.098 3.179 3.397 3.568 3.280 1.990 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20

External reserves provide a limited buffer against the present shocks

The level of reserves had ad been stab able at at c. US$ 3bn until the outbreak ak of the twin crises leav aving the external al po position in a a par articular arly frag agile situat ation with only c. U . US$ 2bn of internat ational al reserves, or c. 1 . 1.4 .4 mont month of h of i imp mpor

  • rts

Source: Ecuador Central Bank

Ecuador Net International Reserves

US$ m Equivalent in months of imports 1.8 2.2 2.0 2.3 2.3 2.1 2.1 2.9 2.3 1.8 1.9 2.4 2.2 1.4

9

slide-11
SLIDE 11

The two shocks have resulted in a recession and a deterioration of the primary balance estimates

Real GDP growth rate

Percent change

Primary Balance of the Non-Financial Public Sector

Percent of GDP 3,7 4,6 4,2 4,2

  • 3,9
  • 1,2

0,8 2,1 2020 2021 2022 2023 As of December 2019 As of April 2020 0,2 1,6 2,7 2,5

  • 6,3

3,9 1,3 1,4 2020 2021 2022 2023 As of December 2019 As of April 2020

Real al GDP growth is expected to fal all to -6.3% this year ar, an and the significan ant reduction in oil revenues will cau ause the primar ary bal alan ance to be negat ative

Note: Estimates of future GDP growth are based upon data prepared in consultation with the IMF. Such estimates are based on numerous assumptions regarding the Republic’s present and future policies and plans and the environment in which the Republic will operate in the future. These estimates speak only as of the date of this presentation. Source: Ministry of Economy and Finance, Republic of Ecuador as of April 13, 2020 Note: Estimates of future primary balances are based upon data prepared in consultation with the IMF. Such estimates are based on numerous assumptions regarding the Republic’s present and future policies and plans and the environment in which the Republic will operate in the future. These estimates speak only as of the date of this presentation.. Source: Ministry of Economy and Finance, Republic of Ecuador as of April 13, 2020

10

slide-12
SLIDE 12

Significant debt service obligations are due in the next several years

Ecuad ador fac aces debt service obligat ations in the coming year ars, am amounting to c. 25% on av averag age of total al expected government revenues ues Ecuador public debt service profile (principal and interest)

US$ bn 9,0 8,1 9,3 8,6 7,9 7,1 7,3 6,6 5,3 3,9 2,8 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Multilaterals (P) Multilaterals (I) Bilaterals (P) Bilaterals (I)

  • Ext. Private not-bonded (P)
  • Ext. Private not-bonded (I)
  • Ext. Bonded debt (P)
  • Ext. Bonded debt (I)

Domestic debt (P) Domestic debt (I) Debt service in % of yearly revenues 31% 25% 28% 25% 22% 19%

Note: The amount of debt service due from April to December 2020 is US$ 6.15 bn. Estimates have been made in close collaboration with the IMF and are based on most up to date data Source: Ministry of Economy and Finance, Republic of Ecuador

11

slide-13
SLIDE 13

As a result, Gross Financing Needs (GFNs) are expected to widen

Gro ross finan ancing needs fo for 2020-2023 2023 ha have ve more than an do doubl bled, , wh when compar ared to to De December 2019 2019 estimat ates Annual Gross Financing Needs between 2020 and 2024

US$ bn 5,6 3,8 4,7 4,5 4,1 13,0 10,2 9,6 9,0 7,1 2020 2021 2022 2023 2024 As of December 2019 As of April 2020

Note: Estimates of future financing needs are based upon data prepared in consultation with the IMF. Such estimates are based on numerous assumptions regarding the Republic’s present and future policies and plans and the environment in which the Republic will operate in the future. These estimates speak only as of the date of this presentation. Source: Ministry of Economy and Finance, Republic of Ecuador as of April 13, 2020

12

slide-14
SLIDE 14

Market access is no longer a funding option for Ecuador

The recent increas ase in risk premia a reflects the general al mar arket shutdown for man any high-yi yield issuers Historical yields to maturity of Ecuador selected bonds (in %)

Source: Bloomberg as of 7 April 2020

20 40 60 80 100 120 1-Oct-19 16-Oct-19 31-Oct-19 15-Nov-19 30-Nov-19 15-Dec-19 30-Dec-19 14-Jan-20 29-Jan-20 13-Feb-20 28-Feb-20 14-Mar-20 29-Mar-20 US$ 1.4bn 2030 9.500% US$ 1bn 2027 9.625% US$ 0.6bn 2025 7.875% US$ 4.1bn 2022 10.750% Social protests after fuel subsidy cuts Beginning of the COVID-19 crisis and the fall of oil prices

13

slide-15
SLIDE 15

Addressing the 2020 financing gap will require exceptional measures

  • In an effort to address immediate short-term financing needs, Ecuador has engaged in discussions with the IMF to obtain emer

emergency gency funding through a a Rap apid Finan ancing Instrument (RFI)

  • In par

aral allel, the au authorities ar are engag aging with the IMF on a a successor Fund-supported ar arran angement that at would build on the current Ext Extended Fund Fac acility (EFF), and aim at bolstering Ecuador’s economic performance, strengthening the foundations of dollarization, and delivering broad-based benefits for all Ecuadorians

  • However ap

approximat ately US$ 3. 3.4bn 4bn finan ancing still needs to be identified an and require a a deferral al or rescheduling of the interest pay ayments 2020 Gross financing needs and associated financing sources

US$ bn 13,0 8,6 1,7 2,7 1,4 1,4 2,4 3,4

Gross Funding needs External funding (multilateral bilateral, etc.) Domestic funding Contemplated IMF Funding Potential other multilateral budget support Chinese bilateral loans Remaining financing gap

PROGRAMMED LENDING IDENTIFIED LENDING Fiscal austerity measures will not be sufficient to cover the remaining financing gap

Source: Ministry of Economy and Finance, Republic of Ecuador

14

slide-16
SLIDE 16

Ecuador’s debt trajectory will be affected by recent developments

Ecuad ador needs to tak ake meas asures to ensure that at the temporar ary exogenous shocks that at hav ave al alread ady become a a liquidity problem do not evolve towar ards a a debt sustai ainab ability is issue

Public Debt-to-GDP ratio between 2015 and 2025

In % 25 30 35 40 45 50 55 60 65 70 75 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Estimates

Note: Estimates of debt projections are based upon data prepared in consultation with the IMF. Such estimates are based on numerous assumptions regarding the Republic’s present and future policies and plans and the environment in which the Republic will operate in the future. These estimates speak only as of the date of this presentation. Source: Ministry of Economy and Finance, Republic of Ecuador as of April 13, 2020

15

slide-17
SLIDE 17

II Focus on Debt Management

16

slide-18
SLIDE 18

Debt management main objectives

Provide the necessary breathing space for a sound recovery of the economy, which may involve a further deferral or rescheduling of the payments that the Consent Solicitation is proposing to defer Continue to work with the IMF and other multilaterals Provide immediate liquidity relief to face the COVID-19 outbreak and the oil price collapse Reduce future refinancing risks and avoid refinancing walls

2 4 1 3 17

slide-19
SLIDE 19

Principles of the debt management

Ecuad ador will intensify engag agement with its debtholders on the bas asis of the following pr principl ples: üTransparency üGood faith efforts for a collaborative process to restore debt sustainability üFair treatment across eligible creditors üConsistency with IMF debt sustainability analysis

18

slide-20
SLIDE 20

Debt management perimeter

The contemplat ated debt man anag agement operat ation will cover al all the mai ain debt cat ategories of the Republic of Ecuad ador

Amount (US$ bn) Resolution

Banks

Bilateral discussions in view of credit conditions

International Bonds

All international bonds are expected to take part in the debt sustainability operation

Domestic Bonds

Domestic sector debt roll-over and interest payments to be rescheduled in order to give breathing space while ensuring domestic sector sustainability

Bilateral

Official sector is expected to provide support through new money

Multilateral 13,4 6,4 13,8 0.2 3,1 19,2

Bonds includedin the Consent Solicitation PetroAmazonasBond

19

Note: Debt stock as of end-February 2020 Source: Ministry of Economy and Finance, Republic of Ecuador

slide-21
SLIDE 21

III Next Steps

20

slide-22
SLIDE 22

Timeline

  • Ap

April 8, 2020 – Launch of the Consent Solicitation

  • Ap

April 13, 2020 – Investor Presentation by Minister to Market/Bondholders

  • Ap

April 17, 2020, 5:00 pm NYT – Expiration of Consent Solicitation. Execution on or as soon as practicable after Required Consents are received

  • Second hal

alf of April 2020 – Expected IMF decision on the Rapid Financing Instrument (RFI)

  • Ap

April 24, 2020 – Expiration of Grace Period, and Legal Default unless the consent solicitation offer is successful

  • May

ay – Ju June 2020 – Investor consultations

  • Mi

Mid-Ju June 2020 – Expected successor IMF program

  • Ju

June – Ju July 2020 – Debt sustainability transaction 23