Colombia Yields Decline on Inflation; Peso Little Changed

Colombia’s peso bond yields rose from a record low ahead of a government auction of new fixed-income securities due in April 2028.

The yield on the government’s 10 percent peso-denominated debt due July 2024 rose one basis point, or 0.01 percentage point, to 5.60 percent at 9:20 a.m. in Bogota, according to the central bank. Yesterday it fell to 5.59 percent, the lowest on a closing basis since the securities were first issued in 2009. The price fell 0.131 centavo today to 136.609 centavos per peso.

The Finance Ministry will offer 500 billion pesos ($282 million) of new 15-year notes over the next three weeks, according to a statement published on the central bank’s website yesterday after the market closed.

“The government is offering more bonds on the long end of the curve and so it’s only natural for other long-term bonds to react this way since it means more competition,” Alejandro Reyes, the head analyst at Ultrabursatiles SA brokerage, said in a telephone interview in Bogota. “Given the level reached yesterday, some investors are also taking profit.”

Colombia will offer 500 billion pesos worth of 6 percent bonds due 2028 in three weekly auctions starting today, according to two participants in a conference call yesterday with ministry officials, who asked not to be identified because the discussions are private.

The ministry will offer new 5.25 percent bonds due Nov. 2018 in three weekly auctions of 500 billion pesos each starting Feb. 6, according to the two people. The ministry didn’t respond to e-mail and phone messages seeking comment on the debt sale plans.

The peso advanced 0.1 percent to 1,769.95 per U.S. dollar. The currency touched 1,750.50 on Jan. 2, the strongest intraday level since July 2011.

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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