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Colombia Plans to Sell Dollar Bonds Abroad After Fed Surprise

Colombia plans to sell dollar bonds abroad a day after the Federal Reserve kept its stimulus program intact, driving down yields on emerging-market debt.

Colombia hired Deutsche Bank AG and HSBC Holdings Plc to sell securities due in 2024, according to a regulatory filing. The country may sell the bonds today to yield about 165 basis points, or 1.65 percentage points, more than U.S. Treasuries, according to a person familiar with the offering who asked not to be identified because the terms aren’t set. The benchmark offering will be at least $500 million, the person said.

Colombia is joining companies and governments in Turkey, Chile and Armenia in planning sales a day after the Fed said it would continue to buy $85 billion of bonds a month. The unprecedented stimulus program has suppressed interest rates, increasing the appeal of higher yielding emerging-market assets.

Garanti Bankasi AS, Turkey’s largest bank by market value, may boost the size of a bond sale by 38 percent to 900 million liras ($461 million). Turkey’s Treasury will hold investor meetings starting Sept. 23 for a possible sale of Islamic bonds. Armenia hired banks for a seven-year dollar bond sale, Chile’s Embotelladora Andina SA plans to meet with investors next week while the Eurasian Development Bank is also poised to sell, according to people familiar with the offerings, who asked not to be identified because the information is private.

Yields on Colombia’s $1 billion of 2023 bonds fell 21 basis points yesterday, the most since the securities were issued on Jan. 22. The yield rose eight basis points to 3.98 percent at 8:40 a.m. New York time.

To contact the reporter on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net

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

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