The Colombian government auctioned peso-denominated TES bonds Wednesday, with yields declining across the board from the previous sale as inflation concerns continue to decline.
The government sold TES bonds due October 2015 carrying an 8% coupon at a cut-off yield of 6.632%, down from 6.649% in the previous sale. The bonds due in October 2018 with an 11.25% coupon had a yield of 7.260% in the auction from 7.417% previously. The bonds due in July 2024, meanwhile, carry a 10% coupon and had a 7.747% yield, from 7.808%.
Inflation became a concern earlier this year as torrential rains washed away highways, bridges and crops, creating sporadic spikes in food prices. But the dry season began this month in Colombia and recent inflation readings have been relatively low. The lower TES yields reflect the low inflation outlook.
In all, the Colombian government sold 350 billion pesos ($200 million) worth of TES in Wednesday’s sale, with total demand reaching COP1.41 trillion.
Demand for Colombian bonds has been high in recent months, mainly as the result of an improved economic landscape and the country securing investment-grade status for its foreign-debt sales from the three major rating agencies. The country lost its investment-grade ranking a decade ago.