Category: Colombia

Colombia’s $468.4 million reopening of its 2037 global issue wrapped up financing needs for next year, leaving the sovereign sitting pretty if market conditions deteriorate. The deal also finished up a $2 billion shelf, hence the odd number. According to a banker on it, the tap of the 7.375% coupon paper saw $3.2 billion in orders and at 102.875 to yield 7.142%, came tight to guidance. Some 450 accounts apparently participated. It was heard at 103.65 Wednesday, the day after the reopening. It was helped by strength at the long end of the US Treasury curve. Barclays and HSBC were the leads.

Colombia’s Central Bank has raised the benchmark overnight lending rate yet again, pushing it up by 25 basis points to 7.25%. This is the highest level in three years and follows the surprise move last month when the Bank raised the rate from 6.75% to 7%. So far this year, the Bank has raised the benchmark rate a total of 125 basis points. The continued growth of the economy in the third quarter and a desire to keep a lid on inflationary pressures prompted the Bank to raise the rate once more.

EAAB, the water and sewage utility for the Colombian capital Bogotá, successfully placed $107 million worth of debt in the local market in the face of almost threefold demand. The issuance of the debt securities (TAB) has extended out the company’s debt profile from four to nine years; the money raised has been used to pay down more expensive and shorter-term debt. This is the first time the company has issued local debt and signals that the markets in Colombia are becoming more stable, according to analysts. Corficolombiana led the issue; Luz Piedad Rugeles acted as legal advisor and the other placing agents were Alianza Valores, Correval and Suvalor.

BBVA’s unit in Colombia is hoping to raise up to $32.3 million via the sale of peso-denominated subordinated bonds today, Friday. The five-year bonds will carry an annual interest rate of 5.35% over the IPC rate of inflation. The funds raised will be used for working capital. The bonds are rated AA+ by Duff & Phelps Colombia. Earlier this month BBVA Colombia raised $55 million via the sale of the same notes.

Almacenes Exito, a leading Colombian retailer, reported its third quarter net profit rose 92 percent on higher sales from newly opened stores and the introduction of its own credit card. Exito earned 12.4 billion pesos ($5.3 million) in the July-September period, compared with 6.5 billion pesos ($2.8 million), in the same period a year ago, said the company in a statement. Revenue rose 25 percent to 1.02 trillion pesos ($437 million) compared to 817.8 billion pesos ($349 million) the year before.

EAAB, the water and sewage utility for the Colombian capital Bogotá, plans to issue $107 million worth of debt in local markets to pay down more expensive and shorter term debt. It is the first time the company will issue local debt in a sign the markets in Colombia are becoming more stable. The sale is expected this week.

Government officials from Chile and Colombia expect to close in on a free trade agreement at meetings this week in Barranquilla and sign it at the end of November when Colombian President Alvaro Uribe visits Chile. The agenda this week includes rules of origin, dispute resolution mechanisms and rules for awarding public contacts. The two countries started talks two weeks ago and the deal is expected to go through quickly as trade in most products between them is already open under earlier deals. Chile exports copper, fruit, wine, medicines to Colombia and has invested almost $1.6 billion in the Andean nation since 1990.

One of Chile’s largest retailers, Cencosud, has acquired a 24.5% stake in Colombia’s largest supermarket chain Exito for $271 million. The Chilean company offered to buy 51.2 million shares from investor Grupo Toro, at 12,500 Colombian pesos a share. Grupo Toro has to give other Exito shareholders 90 days the option to buy the shares before it can sell them to Cencosud.

Anglo-South African brewer SABMiller, owner of Colombian beermaker Bavaria, has failed to buy up the remaining 2% of the company’s shares outstanding in the market to take 100% control of the company. SABMiller spent around $9 million to increase its stake by 0.21% but was unable to tempt or track down all the company’s shareholders with its offer of $19.48 (46,176 pesos) a share. The brewer will not be able to delist Bavaria from the Colombian Stock Exchange, according to local brokers. SABMiller took control of 71.8% of Bavaria last year in a deal worth $7.8 billion.

Colombia’s Central Bank believes the domestic economy may well expand by over 5.5% this year and by 4.5% next year, driven by domestic demand. The Bank’s chief executive, José Darío Uribe, speaking Wednesday at an economic forum in Bogotá, said he believed the confidence of local consumers and businessmen was high and pointed to increased private investment and consumption. In the second quarter of the year, private investment was running at 18%, public investment at 25% and domestic consumption at 5.3%, according to the central banker. Colombia’s GDP grew by 5.96% in the second quarter of the year.