Financial institutions to dominate bond issuance this year again - expert

Wednesday, February 23, 2011

Financial institutions in Colombia will dominate the issuance of bonds this year again, after selling 64.2% of total domestic bonds in 2010, Germán Verdugo, head of fixed-income strategy at local brokerage Correval, told BNamericas.

Financial institutions and non-financial corporations issued bonds worth 13.8tn pesos (US$7.28bn) last year, up 2.91% on the 13.4tn pesos that were placed on the domestic market in 2009.

For this year, Correval forecasts bond issues of 9.87tn pesos, and Verdugo expects that 60-70% of the total will be sold by financial institutions.

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The amount of debt issued in 2011 will decrease due to a more restrictive monetary policy by the country's central bank, and to the fact that many large corporations have already issued long-term bonds during the last two years at attractive interest rates.

The local capital market has seen very strong development since 2009, and this has led to an increase in the number of issuers and more subordinated bonds, Verdugo noted.