This Nonexistent AA+ Bond Is Colombia’s Plan B for Roads
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Colombia’s beleaguered efforts to line up financing for President Juan Manuel Santos’s $25 billion highway program now include a bond that doesn’t even exist.
The infrastructure agency helped develop a hypothetical bond over the past two years to serve as a model for peso-denominated notes that could be sold to fund projects. This month, Fitch Ratings said such a security would merit an AA+ grade on its national scale, one level below its top AAA. Now, the agency is showing the rating to builders to persuade them that they could obtain cheaper financing in the bond market than the preliminary rates that banks are offering.