Chang spoke one day after the International Monetary Fund committed to approving a $300 million loan to Ecuador by April 19,clearing the way for a rescue package of about $2 billion from theWorld Bank and other lenders.

Ecuador wants to start talks with bondholders at the end of April now that it has concluded negotiations with international lenders, Finance Minister Jorge Guzman said. He's told bondholders during informal meetings that the country is still trying to figure out how much it can afford to pay to service its international debt.
``Bondholders are going to have to expect a significant write- off,'' said Chang, who met with Guzman in New Orleans during the Inter-American Development Bank's annual meeting. The country may only be able to pay $1 billion a year to service it debt, instead of the $2.5 billion it owes, she said.

Chase Securities is a subsidiary of The Chase Manhattan Bank. Capital Markets Fiduciary Services, another Chase division, is the fiscal agent for payment on Ecuador's Brady bonds, though it resigned last night as fiscal agent for Ecuador's Eurobond debt.

Last November, Chase urged investors to shun the securities as bondholders prepared to meet with the country's debt negotiators. At the time, Chase's international fixed income research team predicted that an agreement was at least six months away.

IMF Loans

Ecuador's government, which has sought the IMF loans for months, convinced the lender to come through by approving sweeping economic measures that included legislation to adopt the U.S. dollar as the national currency. The IMF also had insisted on Ecuador first make progress with its talks with bondholders, something Chang said hasn't happened yet. The country, mired in its worst economic crisis in a century, will switch to the dollar on April 1 to stem a freefall in the value of its own currency, the sucre, which was threatening to drag the $13.7 billion economy into a bout of hyperinflation. Ecuador's past-due interest Brady bonds jumped 36 percent from Feb. 16 to 28.01 percent of face value, lifted by the IMF accord and the dollar legislation. The IMF and other lenders will disburse about $900 million from the rescue package in the next year, and Ecuador will get the balance of the funds in the following 12 months, said Claudio Loser, the fund's Western Hemisphere director. The IDB, which mainly lends to Latin America, will release $78 million in the next week, said Ciro De Falco, the IDB regional director responsible for its loans to Ecuador.Ecuador became the first country ever to default on its Brady bonds in September as part of an attempt to restructure its debt burden, the highest per capita in Latin America. The government late last year began talks with bondholders to restructure $6.5 billion in bonded debt, including Bradys and Eurobonds.

Brady bonds, named after former U.S. Treasury Secretary Nicholas Brady, are Treasury-backed securities that were created to ease a crisis in emerging market debt that began in the 1980s.