Colombia Shorter-Term Yields Rise to Three-Month High on Sale

Colombia’s shorter-term peso bond yields rose to a three-month high after the government said last week that it planned to issue debt with a maturity of three years or less.

The yield on the 9.25 percent debt due in May 2014 climbed six basis points, or 0.06 percentage point, to 5.18 percent at 10 a.m. in Bogota, the highest on a closing basis since Aug. 9. according to the central bank. The price dropped 0.099 centavo to 105.597 centavos per peso. The yield on the 10 percent securities maturing in July 2024 dropped two basis points to 6.17 percent.

Colombia said Nov. 14 it will sell through the end of this year as much as 4 trillion pesos ($2.2 billion) worth of securities due in January 2014, November 2014 and November 2015 to drain liquidity created by currency intervention.

“Given the increased supply in the short end, some investors are seeking refuge in the longer end,” said Francisco Chaves, a strategist at Corredores Asociados in Bogota.

The Finance Ministry sold last week 519 billion pesos of short-term securities, less than the 670 billion pesos offered. The auction came amid reduced volume after the government said Nov. 7 that it would liquidate Interbolsa SA’s brokerage, which failed to meet a loan payment.

The central bank and government stepped up dollar purchases this year to ease a rally in the local currency that policy makers said was threatening jobs in agriculture and industry by making exports more expensive in dollar terms.

The peso gained 0.1 percent to 1,816.10 per U.S. dollar, extending its rally in November to 0.9 percent, the biggest among 25 emerging-market currencies tracked by Bloomberg.

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

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