Colombian Water Bonds Evaporate

A sale of COP190bn ($90m) in Colombian “bonos agua,” has been delayed, according to brokers managing the sale, following an auction process Wednesday that did not see the minimum amount of orders. It is not clear if and when another auction will be held. In the novel transaction for Colombia, issuer Grupo Financiero de Infraestructura will on-lend proceeds to a group of municipal governments to support water and sewage projects. The issue is to be the first from a UVR2bn (about COP375bn) program, under which the country’s state and municipal level governments can access credit to fund much-needed water and waste improvements, at rates they could never get on their own. In the transaction, structured by boutique Konfigura, 45 cities and one state will pledge future revenues to the trust to guarantee repayment of the bond. The group plans to do 1-2 bond issuances per year, as well as add new issuers to the scheme. Corredores Associados is managing the sale. Officials at Konfigura were not available to comment Thursday.