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

TO BE NOTED: From Inca Kola News:

"5/26/09

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."

"Date: 26 May 2009
Clearing Priee for the 2012 Bonds and 2030 Bonds and Opportunity for Holders who
submitted Offers above the Clearing Priee to revise their Offers to a priee equal to the
Clearing Priee
The Republic is pleased ta announce the Clearing Priees for Bonds accepted for purchase
pursuant ta the Invitation made on 20 April 2009. The 2012 Bonds Clearing Priee is $350 and
the 2030 Bonds Clearing Priee is $350 (in eacb case this is expressed as a priee per $1,000
face amount). As holders are aware, as a result of the prepayment of $740m made in March
2006, there is a pool factor of 0.408 applicable ta the 2012 Bonds and this will be applied
against the original $1,000 faee amount of these Bonds ta ensure that a priee of 35c on the
dollar is paid in respect of the current outstanding face amounts of the se Bonds accepted in the
Invitation. The Clearing Priees for the Bonds reflect the resources of the Republic and are
responsive to the majority of the Offers received.
The Republichas decided ta provide Raiders who submitted Competitive Offers relating to a
Series of Bonds above the applicable Clearing Price the opportunity to participate by revising
these Offers ta a priee equal to the applicable Clearing Priee.
Any Holder of Bonds wishing to submit such a revised Offer (a "Revised Offer") must ensure
that the direct participant in Euroc1ear or Clearstream who submitted the Letter of Transmittal
applicable to its Bonds sends a duly signed fascimile ta the Tender Agent and, if applicable,
the Luxembourg Agent at or before 6.00 p.m. CET on 3 June 2009 attaching the original
Letter of Transmittal amended in manuscript to indicate:
(a) the new Reference Code genetated by Euroc1eat or Clearstream upon the submission of
blocking instructions;
(b) the final Clearing Priee of the respective Bonds as set out above; and
(c) the Number of Bonds and Aggregate Face Amount to whieh the Revised Offer is ta
appty.
This will allow such Bonds to be appropriately identified.
RaIders should be aware that following this announcement of the Clearing Priee of the
respective Bonds, Euroclear and Clearstream will unblock the Bonds of those Holders who
submitted Competitive Offers above the applicable Clearing Priee. Therefore, if a Holder
wishes ta submit a Revised Offer, such Holder will need ta take iuta account that the
necessary Bond Instructions to submit a Revised Offer are delivered to and received by \
- t -
Euroclear and Clearstream, in accordanee with their normal procedures on or prior ta the
deadlines established by each of those clearing systems. Holders of Bonds who wish ta submit
a Revised Offer should therefore contact the relevant clearing system or their custodians as
saon as possible with the instructions necessary ta enable Euroclear or Clearstream, as the
case may be, ta generate a new blocking instruction reference code and an amended Letter of
Transmittal with a Revised Offer ta be submitted in respect of its Bonds.
The intention is ta settle the purchase of any Bonds which are the subject of a Revised Offer
on 12 June 2009 and accordingly, in relation ta Bonds that are the subject of a Revised Offer
only, referenees in the Invitation ta the Settlement Date shaH be read as references ta 12 June
2009.
For the avoidance of doubt, in respect of Bonds validly submitted pursuant ta Letters of
Transmittal with Offer Priees originally specified at or below the applicable Clearing Priee,
the Settlement Date shaH remain 29 May 2009.
ln aH other respects, the terms of the Modified Dutch Auction described in the Invitation shaH
continue ta apply and, except as revised in this communiqué, such tenns shaH apply ta
Revised Offers.
ln view of the Republic's decision ta give the opportunity ta Holders who submitted
Competitive Offers above the applicable Clearing Priee ta offer their Bonds at the Clearing
Priee, the Republic will, pursuant ta the terms of the Invitation, issue information no later
than 12 June 2009 relating ta the aggregate amount of Bonds acquired.
Bolders of Bonds should be aware that, foHowing the settlement of the purchase of the Bonds
pursuant ta the Revised Offer and with the exception of any offer at the Clearing Priee of the
respective Bonds that the Republic may make, at its discretion, in any jurisdiction where the
Joint Dealer Managers have been unable ta contact Holders for legal or regulatory reasons,
the Republic will not offer equal or more favourable terms ta those being offered ta Holders
of Bonds presently.
Any Holders of Bonds who did not submit an Offer previously and would wish ta do sa may
cont~z'Vd Frères Banque at 121 Boulevard Hausmann, 75382 Paris, Cedex 08, France,
TelebhOne\-H+~f\1 44 1J 0030 (Reference: The Republic of Ecuador Invitation).
L\ ~1
Minister osfa FVi~itn~cei ÂocfaitthuerrRi epublic of Ecuador
- 2-"

the extra nine days are to give more time for reflection to those holders she talked to yesterday that are still threatening to hold out

TO BE NOTED: From Inca Kola News:

"5/27/09

Latest on Ecuador's defaulted bonds buyback

So she ain't that pretty, but who cares? She got the full respected talent.
Maria Elsa Viteri, the Susan Boyle of Ecuador finances.

Yesterday we heard that Ecuador would pay 35c on the dollar to buy back the those defaulted Global 12s and Global 30s with the big day set for June 3rd. Today the news is that the tendering date has been put back to June 12th. According to FinMin Viteri, the extra nine days are to give more time for reflection to those holders she talked to yesterday that are still threatening to hold out. There's clearly a game of cat and mouse going on now, but I'd suppose the fact they're playing these chess games augers well for a happy MuffinEnding.

Meanwhile, Reuters reports the Global 2015s, those bonds originally threatened to be included in the default package but eventually allow to roam free and undefaulted, are now trading at 52.75c on the dollar (yield 24%)....quite a comeback from the 25c prices of December and January."

In fact, according to the old method, Peru has been in recession for the whole of 2009.

TO BE NOTED: From Inca Kola News:
"5/20/09

Peru's GDP: Solid proof of the Peru government's lieS

If proof were needed that Peru's GDP figures showing "growth" in 2009 are fabricated beyond measure, then that proof arrived tonight.

Bruno Seminario, leading economist at the UP Universidad Pacifico, has just published this report that shows just how much of a sham the Twobreakfasts government's GDP figures really are. You'll remember that since Twobreakfasts took power the INEI stats office quietly and without any warning, the INEI stats office changed bosses (to an APRA friendly guy) and changed the methodology of GDP calculation. Much of the heavy criticism in recent weeks has been about this change (see this to find out details) because much of the calculation is now done in an uncheckable, black box style that is easily manipulated for political ends (and by all accounts, successfully done, too). So what Seminario has done is to take the raw data and apply the old methodology, i.e. that used in the governments previous to Twobreakfasts, and see how things pan out.

The change is massive, and here's the chart.


Instead of the 3.05% growth rate recorded by the present dubious method, March 2009 comes in at -1.73%, a stunning turnararound of 4.78%. In fact, according to the old method, Peru has been in recession for the whole of 2009. It now becomes clear why this bunch of liars wanted to change the method and also said nothing for three years about the changes. The difference between the two methodologies is just too great to dismiss and must raise serious, nay fatal, questions about the way the data is being collated, calculated and disseminated at present.

The discredited economic policies of Twobreakfasts, Carranza et al cannot be hidden behind a bunch of falsified numbers. The road being taken right now by Peru is the same road taken by Argentina in 2007 when Kirchner decided to change the bosses at INDEC to get himself a bunch of new and better macro numbers. Soon enough, inside the country incredulity turned to anger and anger to laughter, but the world outside Argentina simply turned its back on the country as an invetsment vehicle. This is the chronic damage that is caused by cooking the macroeconomic books."

the US military prescence in the VRAE coca growing region of Peru

TO BE NOTED: From Inca Kola News:

"There is a secret US military base in Peru.....

The secret document as published by La Primera today

.....which only comes as a surprise to those silly enough to believe what the liars that inhabit the Twobreakfasts government say. Peru newspaper La Primera has today got its hands on a secret memo (not secret any more though) that outlines the US military prescence in the VRAE coca growing region of Peru. Even this humble corner of cyberspace knows as much, though. In this post back in February I wrote...

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In fact, there might not be a formal US air base in Peru the same as the one in Ecuador, but anyone who hangs in the right places in lowland Peru more than a week knows the VRAE airbase, supposedly Peru soldiers only, is constantly packed full of US soldiers, planes, copters and air crew.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

...which, funnily enough, is the exact scenario laid out by La Primera in its report today. Here's a section translated by yours truly:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

• "....The government categorically denied the possibility of the installation of a US military base in our country. However, La Primera has gained access to an official document stating the Ministry of Defence coordinated with the ex-commander general of the armed forces, Edwin Donayre, the request of the United States of America to construct an Operations and Intelligence Command Centre at the Pichari military base in the Valle de los Rios Apurimac y Ene (VRAE).

• Via notice 058 VPD/A/SEC dated March 10th 2008, the Vice-minister of Defence Policy, Nuria Esparch Fernández, told Donayre that the administration of the sector coordinated with the Southern Command, via the the Constulting and Military Assistance Group of the United States, the construction plans for "A centre of medical assistance and a command centre for operations and intelligence in the territory where the armed forces are stationed in Pichari."."

Oh how they insulted Evo Morales when he had the balls to accuse Peru of running a secret US base. Let's see what they throw at each other this time, as apologies from Twobreakfasts are as unlikely as a hunger strike."