Colombia plans to sell new dollar bonds and buy back debt

TES Bonds

Colombia goes to global markets for the first time this year and plans to use part of the proceeds to join its Latin American peers in the cheap debt buyback

(See: Symptoms of economic slowdown are becoming more evident).

The Government will sell debt denominated in dollars due 2034 with an 8% return, according to a person familiar with the initial discussions, who asked not to be named because she is not authorized to discuss the matter.

Part of the proceeds will be used to repurchase the country’s global bonds due next year, with coupons of 4% and 8.125%.

In general, it is a good time, there is a good market and they are ahead of other potential issuerssaid William Snead, an analyst at BBVA in New York.

(See: Petro called to “discuss in the streets” the reforms that are coming).

Investors have been expecting more primary activity“, he added.

The country last went to international markets less than two months ago, when it sold 1.6 billion dollars to pay off existing debt.

Now, once again, it joins a number of Latin American nations that They take advantage of lower bond prices to buy back securities.

El Salvador has already bought back some of its debt, while Argentina and Ecuador have announced plans for similar deals.

The sale also comes amid the president’s ambitious plan Gustavo Petro to reform health and pension systems of the country this 2023 and the working market.

(See: Companies “play it” to take on challenges and meet their goals in 2023).

While the details of the pension bill are still unclear, analysts cautioned that Pension funds are important players in the Colombian asset market and that changes in the system could affect bonds and the peso.

This Tuesday, the Ministry of Finance reported that it auctioned $375,000 million in face value in Short-Term Treasury Securities (TCO), for the reference denominated in pesos with maturity on December 5, 2023.

TES bonds.


Purchase intentions for $873,000 million were received, 3.5 times the amount offered, and the high demand allowed the over-allocation clauses to be activated.

(See: Trade balance deficit moderated 5% in November 2022).

The auction cut-off interest rate was 12.920%.

This Short-Term Treasury Securities (TCO) program is part of the strategy of the Nation of contribute to the development of the internal capital market, incorporating liquid references in the short part of the yield curve.


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