Category: Colombia

Colombia issued $355 million in bonds maturing in 2013 and will use some of the proceeds to buy back $160 million in debt set to mature in 2009. The move is part of the finance ministry’s strategy of prepaying expensive debt and replacing it with lower-cost debt. Last month Colombia prepaid $1.25 billion owed to the Inter-American Development Bank.

The World Bank has approved a $260 million loan to support Colombia’s Natural Disaster Vulnerability Reduction Project, a 10-year governmental program that seeks to reduce the fiscal vulnerability of the state when reacting to natural disasters. The loan is repayable in 14 years and will have a grace period of eight and a half years. The World Bank estimates floods and earthquakes cost Colombia over $1 billion annually.

Colombia has received a $613 million loan from the International Monetary Fund as part of an agreement that commits the government to limiting growth in spending. The IMF agreed to let the government increase this year’s budget deficit target to 2.5 percent of gross domestic product from 2.3 percent. Colombia will stick to a budget deficit target of 2 percent of GDP for 2006.

Colombia is seeking loans of another $1.2 billion from the Inter American Development Bank (IADB). The highly-indebted country, which accounted for 12 percent of total lending approved by the IADB in 2004, has recently announced it would disburse $1.3 billion in emergency loans extended by the IADB in 2003. IADB president Enrique Iglesias has said that the bank plans to experiment in extending loans to Colombia in Colombian pesos.

Heineken announced that it is among companies interested in buying Colombia’s Grupo Empresarial Bavaria as demand for beer in emerging markets outpaces consumption in the US and Western Europe. Fourteen percent of Heineken’s sales last year came from the Americas.