Pedestrians in Bogota, Colombia, on Wednesday, Dec. 17, 2025. - Photographer: Nathalia Angarita/Bloomberg
BOGOTA: Colombia has sold the equivalent of US$6bil in peso bonds directly to a foreign investor, the latest in a set of unprecedented debt management operations seeking to meet the nation’s financial needs and reduce its swelling debt levels.
The 23 trillion pesos or about US$6bil transaction represents a record inflow into Colombian government peso bonds, or TES, public credit director Javier Cuéllar said.
The notes were sold to yield about 40 basis points more than they traded at in the secondary market, according to data from the stock exchange.
The peso appreciated as much as 2.1% last Friday, while TES yields fell sharply across the curve. US dollar bonds also gained.
“This operation is the first of several that could potentially be executed with this investor,” the Finance Ministry said later in a statement. It “reflects a vote of confidence in the economy and the market for Colombia’s public debt”.
The notes sold last Friday mature in 2029, 2033, 2035 and 2040 to yield 12.99%, 13.05%, 13.24% and 13.32%, respectively, according to stock exchange data.
The move follows a sharp sell-off in local bonds, as investors focused on the country’s deteriorating fiscal situation, the potential for rate increases and a murky political outlook ahead of elections next year. Policymakers left the key rate at 9.25% last Friday, the highest in Latin America after Brazil.
The notes have handed investors losses of 4.2% so far this month and are the worst performing local credit in emerging markets.
“The operation should decrease market anxiety around the republic’s financing strategy ahead of the 2026 election and the expiry of the total return swap signed with international banks,” said Armando Armenta, a senior economist at AllianceBernstein in New York.
Due to confidentiality agreements, the name of the buyer can’t yet be disclosed, Cuéllar said in a phone interview. The fund is a buy-and-hold investor, he added.
“We are not alone in facing the speculative attacks against Colombia by Brazilian hedge funds,” Cuéllar said in a LinkedIn post.
The investment is larger than the US$4bil net inflow into emerging market-dedicated debt funds in the week ended Dec 17 – the biggest weekly gain since July – according to EPFR Global data compiled by Bank of America Corp.
The operation is part of a new strategy by the Finance Ministry to increase the use of private placements with investors, according to Cuéllar.
“That transaction alone represents almost 20% to 25% of the planned TES issuances for 2026,” said Alejandro Arreaza, an economist at Barclays.
“This could give them room to reduce the size or postpone a potential return to the markets.” — Bloomberg
