Oct. 16 (Bloomberg) -- Colombian companies will issue more bonds in the local market after sales rose to a record this year, said Sandra Gomez, chief investment officer of the nation’s third-largest pension fund.

“There continues to be liquidity in the market,” Gomez, who helps manage about 13.7 trillion pesos ($7.4 billion) at BBVA Horizonte Pensiones y Cesantias, said in an interview at her Bogota office yesterday. “There are several issuances that are still pending and you see more and more companies interested in selling debt.”

Colombian companies have tapped the local debt market to take advantage of falling borrowing costs after the central bank slashed the benchmark rate to a record low of 4 percent to fuel growth. Corporate debt sales totaled a record 11.34 trillion pesos ($6.14 billion) so far this year, compared with 5.7 trillion pesos in all of 2008, according to the stock exchange.

Companies with plans to sell debt include Empresas Publicas de Medellin SA, a regional utility that said it will issue an additional 1 trillion pesos in securities; energy distributor Codensa SA, which plans to sell as much as 600 billion pesos of dollar and peso bonds; and Helm Bank SA, which said in July it may offer as much as 1.5 trillion pesos of securities.

Infrastructure Spending

Interconexion Electrica SA, Latin America’s biggest power line operator, said earlier this month that it will create a company that may sell bonds and seek partners such as pension funds to help finance a 5.6 trillion-peso highway project.

President Alvaro Uribe’s government last month approved 10 trillion pesos for the construction of three highways, which the National Planning Department estimates will create 43,000 jobs and boost gross domestic product by as much as 1.8 percent.

Colombia’s increased infrastructure spending “opens the possibility” for continued investment by pension funds in infrastructure projects through corporate bonds and private equity funds, according to Gomez.

“You obviously have to take into account profitability, but there is a clear interest from pension funds in continuing to finance infrastructure projects that will help in the country’s development,” said Gomez.

Private equity funds such as ND Capital Partners, headed by former public credit director Julio Torres, and Toronto-based Brookfield Asset Management Inc. have started funds in Colombia focused on infrastructure.

“An infrastructure project is a long-term and complex issue,” Esteban Piedrahita, head of the National Planning Department, said in an interview at an infrastructure seminar in Bogota on Oct. 14. “We needed those key intermediaries such as private equity funds that are dedicated to investing in infrastructure projects, that understand the complexities of these projects and can therefore capture the resources and carry out the investment.”

Pension funds are limited by law to invest no more than 5 percent of the total resources they manage in local private equity funds and up to 5 percent in international funds.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

Last Updated: October 16, 2009 12:01 EDT