The Colombian government is studying market conditions to sell $1
billion in international bonds after September to help meet its
financing requirements for 2010, the country’s director of public
credit said Tuesday.
“The idea is to issue $1 billion to pre-finance next year’s needs,
but that will happen after September as markets are closed now because
of vacations,” Viviana Lara told Dow Jones Newswires on the sidelines
of a seminar. “We are working on both fronts, in the international
market and in the local market,” she added.
The new international bond is expected to mature in 30 years, much
longer than the 10-year bond the government recently sold. On April 14,
Colombia sold $1 billion in international bonds after reopening its
2019 bond, also looking to secure 2010 financing.
“The nation’s goal is to migrate from 10-year bonds to 30-year bonds,” Lara said.
The government plans to raise a total of $2.5 billion from
international bonds for 2010 financing, she said, of which it has
already secured $1 billion.
That would go toward next year’s need to raise $3.75 billion in
foreign debt and 26.1 trillion Colombian pesos ($13 billion) from the
sale of local peso-denominated bonds.
Alvaro Camaro, an analyst at local brokerage Interbolsa, said the
government is moving in the right direction to pre-finance next year’s
requirements as Colombia will have elections in 2010, adding
uncertainty to markets.
Lara said the government also is moving ahead with its plans to
sell 30-year peso-denominated local bonds, known as TES, as there is
demand for longer-term investment options in the market.
Alberto Bernal, an analyst at the Miami-based investment bank
Bulltick Capital Markets, said the government may start selling 30-year
TES bonds this year because insurance companies and pension funds are
seeking new notes with longer terms.
Currently, the longest paper is the 16-year bond that matures in 2024.
The government’s consolidated fiscal deficit will likely widen next
year to the equivalent of 3.4% of gross domestic product from an
expected 2.4% in 2009, as revenue falls while spending rises to
stimulate the economy.