Positive Sentiment Aids Colombian LM Trade

Positive market tone acted as nice springboard for Colombia Tuesday when the sovereign decided to pull the trigger on a retap of its 6.125% 2041s in an effort to raise funding for a cash tender of its outstanding bonds that begins today. In the end, the country was able to upsize its reopening after watching books grow to over $3.6bn in size. Emerging with attractive 200bp area whispers and tightening to 195bp on official guidance, the issuer was able to price at 117.738 to yield 4.964%. The deal is thought to given investors around 20bp-25bp concession to the 170-175bp secondary level seen the day before pricing. “The timing couldn’t be better. Market tone was great and the issuer got a good price for size,” notes a syndicate away from the deal. The bonds had opened at 121 on price basis Tuesday and later dipped to 118 in the aftermarket, according to an investor. This comes as the sovereign readies a cash tender for the purchase of eight series of dollar bonds with maturities ranging from 2013 to 2027 and an outstanding size of $5.87bn. Colombia is offering to pay 110.125 on its 10.75% 2013s, 119.25 on its 8.25% 2014s, 101.875 on its FRNs due 2015, 121.875 for its 8.7% 2016s, 122.875 on its 7.375% 2017s, 158.375 on its 11.75% 2020s, 139.75 on its 8.125% 2024s and 133.00 on its 8.375% 2027s. The offer officially expires on Thursday, but may expire as early as 4:00pm New York time on Wednesday. The sovereign is offering to purchase an aggregate principal amount of bonds that will not exceed $600m or result in an aggregate principal price of more than $750m. HSBC and JPMorgan acted as leads on the bond and dealer managers on the tender.