Colombia may obtain an investment-grade rating should it follow through with plans to create an oil stabilization fund for “counter-cyclical” savings and to pay down debt, RBS Securities Inc. said.
“Follow-through action on an oil stabilization fund and fiscal responsibility law should provide the necessary catalyst for the investment-grade ratings from Moody’s and Fitch and reaffirm our convergence trade on external credit spreads to the high-grade pack over the next 3-6 months,” Siobhan Morden, head of Latin America strategy at RBS in Stamford, Connecticut, wrote in a report today.
Colombia’s bonds are rated Ba1 by Moody’s Investors Service and BB+ by Fitch Ratings, which are both one level below investment grade. Standard & Poor’s rates the bonds at BBB-, the lowest level of investment grade, and the government at BB+, one notch below.
(Andrea Jaramillo, Bloomberg)