Colombia Seizes Window With 2019

Colombia has priced a $1bn 2019 bond at 99.136 with a 7.375% coupon to yield 7.500%, or 502.9bp over UST. Bankers away from the deal say Colombia paid about 50bp-60bp new issue premium, based on its 2017s opening Tuesday at yields of around 6.95%. This compares to roughly 40bp on last month’s Mexico issue. The Ba1/BBB minus bond through Barclays and Morgan Stanley was heard trading up 25-50 cents in the grey market. The transaction saw demand of just over $3bn, according to the issuer, from 141 accounts, about 66% of which were based in the US, 20% in Europe and 10% in Colombia. “We saw that there were good conditions and decided to execute the trade, anticipating harsher conditions in the future and other countries and corporates trying to access funds,” Maria Escobar, head of international capital markets at Colombia’s ministry of finance and public credit, tells LatinFinance. “We thought if we were the first issuer and a good issuer we could re-open the market for sovereigns and corporates,” she adds. Escobar says Colombia has always been active in pre-funding, but conditions last year did not allow this. The sovereign secured $2.4bn loans from multilaterals in October as a backup. Now, she says the sovereign will decide whether to disburse $1.4bn of those funds, or to use the full $2.4bn and keep the rest to pre-fund 2010. More details will be available when Colombia announces its 2009 financing plan later this month. Colombia last hit the international bond market almost a year ago, reopening for $650m its 7.375% of 2017 bond to yield 5.997% and $350m in 7.375% 2037 bonds to yield 6.601%.