Colombia to swap $509 mln in local bonds

BOGOTA, May 18 (Reuters) – Colombia’s national government will swap 2 trillion pesos ($509 million) in local bonds with the finance ministry’s treasury department, the government said on Monday.

The swap – the third so far this year – will take place on Monday and Tuesday and comes as the government is seeking resources to carry the country through the coronavirus pandemic and low oil prices.

Including this operation, the government has accumulated 6 trillion pesos in swaps this year. The most recent swap took place on Friday when the government swapped 1.8 trillion pesos with the central bank

Monday’s swap will delay the expiry of between 15 and 20 trillion pesos during 2020 and 2021 in local treasury bonds, director of public credit Cesar Arias told local radio.

“It allows us to optimize our expiry profile…we have also looked to optimize interest costs,” Arias told Javeriana Estereo radio.

The country’s expiry obligations are now less than 5 trillion pesos for this year and 12 trillion pesos for next.

Arias did not rule out future swaps, including with the market.

“These debt management operations this year, given the special circumstances that we have been living, have been more in the official sector, but we don’t rule out that if conditions keep normalizing and are favorable we could also do debt operations with domestic and international market participants,” he said.

The Fiscal Rule Advisory Committee widened the government deficit limit for 2020 to 6.1% of gross domestic product – equivalent to about 60 trillion pesos – earlier this month, ahead of an economic growth contraction the government predicts will reach 5.5%.

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