Category: Colombia

Colombia’s Central Bank raised the benchmark interest rate a further 25bp Friday, from 7.50% to 7.75%, to stave off inflationary pressures, according to analysts. Last month, against market expectations, the Bank raised the benchmark interest rate to 7.50% from 7.25%, saying it was moving to slow growth in the country. The Central Bank is targeting inflation of between 3.5% and 4.5% this year.

Chilean clothing retailer Forus has moved closer to entering the Colombian market after agreeing to take a stake in local firm La Maravilla, buying inventory and 21 shops across the country. The retailer has been evaluating its entry into the Colombian market for some time now and has opted for buying into a local company. At the end of last year, Forus, which also has operations in Uruguay and Peru, raised around $45 million after it listed 20% of its capital on the Santiago Stock Exchange to help fund its expansion plans.

Colombia’s financial regulator has approved the public tender offer by local food retailer Almacenes Exito for rival supermarket chain Carulla Vivero, according to a statement by Exito. The retailer has offered to buy a minimum of 7.8 million ordinary shares, representing 22% of Carulla’s share capital, and a maximum of 20.4 million shares, or 57.7%, at a price of $15.792 per share. The deal will be worth between $123 million and $323 million.

Colombia’s largest energy provider, state-controlled Interconexión Eléctrica SA (ISA) has sold $554 million in bonds in a dual-tranche offering. The offering comprised $200 million of notes maturing January 30, 2012, and callable after three years and $354 million of 10-year bonds maturing January 30, 2017. The 2012 bonds were sold at par to yield 7.875% and the 2017 paper at par to yield 8.8%. ABN AMRO and JP Morgan arranged the transaction.

The board of Colombia’s largest food retailer, Almacenes Exito, has approved a share offering worth almost $117 million. Exito will sell 24.7 million shares, representing 11.8% of the company’s capital. The money raised will go towards financing the acquisition of local rival Carulla Vivero, which Exito agreed to buy last year for $433 million. Last month, the company secured a loan worth $300 million arranged via a group of foreign banks led by JPMorgan Chase.

Colombia extended out its local yield curve when it sold $138 million of local-currency UVR-linked bonds on Wednesday, achieving a yield of 4.84%. The 16-year bonds mature February 21, 2023, and carry a coupon of 4.75%. Prior to this issue, the longest-maturity Colombian government peso bond was the 2020. The new instruments were snapped up by local pension funds looking for long-term investments.

French retailer Casino Guichard Perrachon announced on Tuesday that it had exercised its right of first offer to buy a 24.5% stake of Colombia’s largest supermarket chain Exito in which it already has a 38% share. Casino said it had offered to pay 13,052 Colombian pesos ($5.86) per share for the 51.2 million shares owned by the Toro family for a total of around $300 million. According to the Exito shareholders’ agreement, Casino and the Toro family have 15 days to agree on the sale procedure. If no agreement is reached by the end of this period, the Toro family will sell the shares through a “martillo” auction process on the Colombian stock exchange. Casino’s offer is higher than the 12,400 pesos ($5.58) per share offered last October by Chilean retailer Cencosud. Following Casino’s announcement, Cencosud said it was dropping its offer. Last year, Exito bought its rival Carulla Vivero – the country’s second-largest retailer – for $433 million.

Luis Guillermo Plata becomes Colombia’s new trade and industry minister today, Tuesday, replacing Jorge Humberto Botero who is stepping down for personal reasons. Plata’s immediate priority is to push through the TLC trade agreement with the US. Plata, who holds a master’s degree in business administration from Harvard, was previously director of the government’s export promoting agency, Proexport.

State-owned Colombian power company Empresa de Energía de Bogota (EEB) is to refinance the purchase of natural gas pipeline operator Ecogas by issuing up to $1.4 billion in global bonds, according to Dow Jones. The bonds, which will carry a maturity of seven to 10 years will be used to take out a nine-month syndicated loan secured with foreign banks at the end of last month. EEB bid $1.45 billion at the beginning of December to win Ecogas at auction, beating off local rival Promigas.

Bancolombia, Colombia’s largest bank, said Wednesday that a local prosecutor had lifted arrest orders for the Bank’s president and vice-president, Jorge Londoño Saldarriaga and Federico Guillermo Ochoa, respectively. The Bank said that, along with Londoño and Ochoa, it is studying what action it will take in light of these developments. Earlier in the day, the Bank had named Jairo Burgos, a Bancolombia vicepresident who serves as its legal counsel, to be acting president while Londoño prepared his legal defense.