Colombia’s Peso Bond Yields Rise for Fourth Day Before Debt Swap

Colombia’s peso bonds fell, pushing yields higher for a fourth day, before a debt swap this month in which the government plans to repurchase short-term local securities in exchange for debt due between 2015 and 2026.

The yield on Colombia’s 10 percent benchmark bonds due in July 2024 rose three basis points, or 0.03 percentage point, to 7.33 percent at 3:08 p.m. New York time. That’s its highest level on a closing basis since Sept. 1. The bond’s price fell 0.254 centavo to 121.713 centavos per peso.

Yields on the benchmark bonds have risen 15 basis points since the government on Sept. 9 announced its plan to buy back as much as 39.5 trillion pesos ($22 billion) worth of local securities as it seeks to issue new debt maturing in August 2026. The Finance Ministry on Sept. 20 will seek to repurchase peso bonds due April 2012, August 2012, April 2013, November 2013 and May 2014, and offer in return peso debt due October 2015, October 2018 and August 2026, it said in a statement.

“The market has been adjusting to the swap announcement,” said Daniel Lozano, an analyst at Serfinco SA brokerage in Bogota. “Now what it’s waiting for is the conditions that will be offered.”

The Finance Ministry will announce the yields at which it will offer the securities at 9 a.m. New York time on Sept. 20.

Colombia canceled its weekly auctions of peso bonds, known as TES, scheduled for today and Sept. 21 ahead of the bond swap. The next debt auction will be carried out Sept. 28, according to a presentation from the ministry.

Colombia’s peso fell 0.8 percent to 1,826.75 per dollar, from 1,813 yesterday.

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

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net