Ecuador president raises spectre of default

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Investors are panicking to sell Ecuadorean paper after new president Rafael Correa declared the country's foreign debt "illegitimate" at his inauguration on January 15. Since his landslide victory on November 26, the benchmark 10% dollar bond due in 2030 had lost a third of its value by January 25, trading at 67 cents.

With memories of two other significant haircuts still fresh - once during the Brady restructuring in 1995 and again in the default of 1999 - Ecuadorean credit default swaps hav

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