Bogotá raises $159 mln in local bond market

Bogotá raises $159 mln in local bond market

Bonds Debt Capital Markets Fixed Income Funds Colombia Latin America

The Bogotá city government raised COP600 billion ($158.6 million) worth of peso-denominated notes from a two-part sale in the local market on Thursday, according to the Colombian stock exchange BVC.

The capital city priced, in a Dutch auction, COP212.6 billion worth of 10-year notes at the Consumer Price Index (IPC) plus 3.7%. The 2030 notes were 1.8 times oversubscribed, it said in a securities filing.

It also issued COP387 billion worth of 20-year notes in inflation-linked UVRs at 3.93%. The 2040 notes were two times oversubscribed, it added.

Both Dutch auctions began with a hidden maximum initial rate, a source at the Colombian stock exchanges BCV said.

Banco Itaú led this transaction with Bancolombia as the other bookrunner.

Bogotá announced its intention to issue local bonds in April during an online presentation by Juan Mauricio Ramírez, Finance Secretary of Bogotá. The city’s fiscal council, Confis, approved the bond sale on May 5.

S&P Global affirmed its AAA rating for Bogotá's COP2 trillion bond program in April, while Fitch Ratings upheld the city government's long-term rating at AAA(col) with a positive outlook in June 2019.

The transaction is framed in the city’s COP2 trillion debt program, which received approval from the securities administration in October 2019. The deal will bring Bogotá's outstanding debt to COP3.4 trillion, the city said.