Bancolombia SA (BCOLO) offered to buy back its subordinated dollar bonds due 2017 in exchange for securities due five years later to extend maturities and reduce financing costs.
Bancolombia (PFBCOLO) offered to swap as much as $400 million worth of the 6.875 percent notes due 2017 for its 5.125 percent subordinated bonds due 2022, according to a filing today. The offer ends Oct. 5.
The swap follows the Medellin-based bank sale last week of a record $1.2 billion of bonds overseas amid a tumble in global borrowing costs. The average yield on dollar debt for Colombian companies fell to a record low 4.08 percent yesterday, JPMorgan’s CEMBI Broad index shows.
“Not only is Bancolombia extending maturities from five to 10 years but its cutting costs,” said Daniel Velandia, the head analyst for Bogota-based brokerage Correval SA. “There’s appetite for corporate issuance from companies in emerging markets with solid fundamentals, such as Bancolombia.”
Bancolombia is rated Baa3, the lowest investment grade ranking, by Moody’s Investors Service.
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