Interbolsa Threatens Local Corporate Issuance

Fallout from the government liquidation of Interbolsa could be a factor in the postponing of planned corporate issuances in Colombia’s domestic bond market, according to local fixed-income sources following several upcoming domestic sales. Gas companies Surtigas (COP580bn, or $318m), Gases de Occidente (COP200bn), and Promigas (COP200bn) were among those expecting to issue by the end of November, timing that is now less certain. Grupo Argos had also been preparing a COP750m convertible bond sale. With TES rates widening 20bp or more following the Interbolsa news, the sources say the plan is to wait for now and see where the market settles in the next few weeks. A recent issue from Colombian state-owned, nationally AAA-rated development finance agency Findeter was seen by sell-siders as satisfactory, but not necessarily strong enough to lead corporates to believe it is the right moment to issue. Interbolsa’s problems are not expected to be indicative of a systematic problem, and liquidity is largely expected to return to normal by the end of the month. Colombia’s financial markets regulator last week ordered the liquidation of Interbolsa’s brokerage firm, and has taken custody of its assets due to liquidity problems. Interbolsa fell short on funds, missing a payment for a COP20bn one-day loan, which was seen as indicative of risky repo-related cash decisions.