Oil Report

UPDATE 1-Ecuador offers 30 percentfor defaulted bonds

(Adds details and background)

QUITO, April 20 (Reuters) - Ecuador’s government offered on Monday to buy back up to $3.2 billion in defaulted debt for a maximum 30 percent of face value in a process that will include an auction.

Finance Minister Elsa Viteri said auction bids will be taken until May 15 with decisions likely to be made on the bids by May 26.

Viteri said the buyback would include a “modified Dutch auction” and she expected the offer price to drop below 30 cents on the dollar in the bidding process.

The debt restructuring plan came only days before Ecuadoreans decide whether to reelect leftist President Rafael Correa, who refused to repay the country's 2012 ECUGLB12=RR and 2030 ECUGLB30=RR global bonds last year on grounds the debt was illegally issued by past administrations.

Wide acceptance by investors of the debt plan is seen as key for Ecuador to return to the international credit markets and secure multilateral loans as the global financial crisis hits the OPEC-nation’s economy.

Viteri said she expected the government’s offer to be well received by the market. (Reporting by Alonso Soto, Editing by Walker Simon)