Ecuador Selling $2 Billion of Bonds

Ecuador is selling $2 billion of bonds on Tuesday, the South American country's first international debt deal since a 2008 default.

The 10-year bonds are being offered with interest rates of 7.95%, according to a banker familiar with the deal.

Ecuador's return to global capital markets underscores some investors' increasing willingness to tackle risky wagers as they seek to bolster returns in an environment of record-low interest rates.

Proceeds from the deal will be used to fund budgetary items and to strengthen the country's infrastructure and transportation system, the government said. Credit Suisse Group AG and Citigroup Inc. are the banks on the bond offering.

In 2008, Ecuador defaulted on $3.2 billion in global bonds, a debt burden that President Rafael Correa at the time called illegal and illegitimate. A year later, Ecuador bought back 93% of the defaulted debt at 35 cents on the dollar.

The country has $650 million of bonds due in 2015, which the government continues to service. Standard & Poor's and Fitch Ratings have given this debt a B rating, which is in "junk" territory.

Some of the proceeds from Tuesday's sale will likely go toward refinancing this debt, according to people involved with the deal.