The Colombian peso was the standout performer among global currencies in June, appreciating 7.4% on the month even as the US dollar broadened its strength and oil prices dropped sharply. According to the Monthly FX Market Report published by the research arm of Bancolombia (NYSE: CIB, BVC: BCOLOMBIA), the peso closed the month at 3,415.25 per dollar, a gain of 274 pesos over the period. The report was prepared by the Economic, Industry and Market Research Area of Grupo Cibest, the financial holding group that owns Bancolombia.

The move ran against the grain of the month’s external drivers. The dollar index (DXY) strengthened 2.3% and Brent crude fell 20.7%, a combination that would ordinarily weigh on a commodity-linked emerging-market currency. Instead, the peso rose on domestic factors tied to Colombia’s presidential election, tracking a rally in local assets that priced in a higher probability of a market-friendly outcome.

The election set the tone

The peso’s appreciation was in line with the rally in local assets that followed the first round of the presidential election, which raised the perceived odds of a right-wing candidate’s victory, the report said. That pattern — commonly observed across the region — limited any upside for the dollar after the second round. Abelardo de la Espriella was elected to govern for the 2026–2030 term, winning 49.63% of the vote, or 12,960,166 ballots, in the tightest race since 1994. Iván Cepeda secured 48.67%, or 12,708,312 votes, and conceded after the official tally was released.

Overseas voting favored de la Espriella, at 64%, the report noted, while domestically he drew strong support in central regions, including Norte de Santander at 76%, Casanare at 69%, Santander at 65%, Antioquia at 64% and Huila at 61%. Voter turnout reached a historic high of 26.3 million participants, or 63.6% of the electorate, with blank votes marginal at 1.6%.

Markets reacted positively to the shift in the government’s political spectrum. JP Morgan recommended maintaining long positions in TES, Colombia’s peso-denominated treasury bonds, according to the report; the bank also held a neutral stance on the peso and closed its short positions against the Brazilian real and the Mexican peso. Through the month the dollar traded between 3,385 and 3,613 pesos, with average intraday volatility of 44 pesos.

“The Colombian peso appreciated in June on idiosyncratic factors, defying the global backdrop.” – Economic, Industry and Market Research Area, Grupo Cibest (Bancolombia), Monthly FX Market Report, June 2026

The central bank resumes its hiking cycle

Following a pause in April, the Banco de la República, Colombia’s central bank, resumed its tightening cycle and, by majority decision, raised its policy rate by 75 basis points to 12%. The report characterized the decision as reinforcing a more restrictive stance amid persistent inflationary pressures, in an environment where tensions between the bank and the Executive appeared to have eased. That rate level, it said, is supportive of long peso positions.

Major central banks abroad kept a cautious posture. The Federal Reserve unanimously held its policy rate in the 3.50% to 3.75% range and revised its expected rate path higher, with the median projection for 2026 pointing to a 25-basis-point increase. The European Central Bank raised its policy rate by 25 basis points to 2.25%, a level not seen since April 2025, while the Bank of Japan lifted its rate by 25 basis points to 1.0%, its highest since 1995.

Defying the global backdrop

The peso appreciated on idiosyncratic factors even as the broader environment turned less favorable, the report said. Markets closely tracked the Middle East conflict, where the US and Iran reportedly reached a peace memorandum that included the reopening of the Strait of Hormuz, the lifting of the US blockade on Iranian ports, the release of frozen Iranian assets and a 60-day window to discuss Iran’s nuclear program. In that context Brent prices fell 20.7%, closing at $72.97 USD per barrel, while WTI settled at $69.60 USD, down 20.3% on the month. The report cautioned that the normalization of trade flows would be gradual, citing reported Israeli attacks and episodes of tension between the US and Iran that leave a definitive peace uncertain. Gold prices fell 11.8%, closing at $4,023 USD per ounce, on shifting rate expectations and reduced demand for dollar-denominated safe-haven assets.

The dollar index, meanwhile, strengthened 2.3%, driven by expectations of higher-for-longer US interest rates. Even so, the peso outpaced its regional and developed-market peers by a wide margin. Among the currencies that gained against the dollar in June, the Swedish krona rose 5.2%, the Chilean peso 3.7%, the Swiss franc 3.5%, the Canadian dollar 2.9%, the Brazilian real 2.6%, the Japanese yen 2.1% and the euro 2.1%, while the Mexican peso and the Peruvian sol added 0.9% and 0.5%, respectively. The Colombian peso’s 7.4% advance left the field behind.

The month ahead

The research team expects the dollar to trade within a range of 3,440 to 3,580 pesos in July, against a backdrop of elevated global uncertainty. Markets are likely to maintain a constructive bias following the change in government, the report said, though cabinet appointments and signals on fiscal consolidation from the incoming administration will be key to sustaining the trend.

The bank framed the risks in two directions. Upside risks for the dollar remain linked to the deterioration of public finances: the Ministry of Finance has explicitly highlighted the need to strengthen fiscal revenues through an adjustment of around 1.6% of GDP, a scenario the report said would be necessary to stabilize net debt below 60% of GDP over the next decade. Colombia’s fiscal trajectory has already drawn scrutiny from ratings agencies, with S&P Global Ratings cutting the country to BB- earlier this year on fiscal concerns. Downside risks for the dollar, by contrast, persist in connection with carry-trade strategies, particularly as the central bank resumes its rate-hiking cycle and widens the rate differential that rewards holders of peso assets.

The Monthly FX Market Report was prepared by the Economic, Industry and Market Research Area of Grupo Cibest, with contributions from International FX and Rates Analyst Maria Paula Gonzalez, Chief Economist Laura Clavijo and Macroeconomic Research Manager Jose Luis Mojica, drawing on data from SetFx, LSEG Workspace, the Banco de la República, the Departamento Administrativo Nacional de Estadística (National Administrative Department of Statistics) and JP Morgan.

SierraCol Energy Andina, LLC, a wholly owned subsidiary of SierraCol Energy Limited, has initiated a cash tender offer to repurchase up to $300 million in aggregate principal amount of its outstanding 6.000% Senior Notes due 2028. The offer began on October 23, 2025, and is contingent upon the successful issuance of new senior debt securities.

SierraCol Energy, headquartered in Bogotá, Colombia, is the country’s largest independent oil and gas producer by gross operated and jointly operated production. The company was formed in 2020 by the spinoff of Occidental Petroleum’s Colombian assets. It operates across the Llanos, Middle Magdalena, and Putumayo basins.

The company has been the subject of recent divestiture discussions, with Carlyle reportedly exploring a potential $1.5 billion sale of its stake in the firm.

SierraCol is backed by The Carlyle Group (NASDAQ: CG), which holds its investment through Carlyle International Energy Partners (CIEP). CIEP manages approximately $21 billion in assets focused on the global energy sector outside North America.

As of 2024, SierraCol reported free cash flow of $172 million and net debt of $511 million. The company has been the subject of recent divestiture discussions, with Carlyle reportedly exploring a potential $1.5 billion sale of its stake in the firm.

The notes, originally issued in September 2021 with a total principal of $600 million, are listed under CUSIP numbers 82653L AA9 (Rule 144A) and U8215L AA2 (Regulation S). The tender offer is being conducted in accordance with the terms outlined in the Offer to Purchase dated October 23, 2025.

The company has set a maximum repurchase amount of $300 million, though it may adjust this figure at its discretion. Holders who submit their notes by 5:00 p.m. (New York City time) on November 5, 2025, will be eligible for an early tender payment of $50 per $1,000 principal amount. These early participants will receive a total consideration of $1,000 per $1,000 principal amount, inclusive of the early payment.

Notes tendered after the early deadline but before the expiration time of 5:00 p.m. (New York City time) on November 21, 2025, will be eligible for $950 per $1,000 principal amount. All accepted tenders will also receive accrued and unpaid interest up to, but not including, the applicable settlement date.

SierraCol may elect to settle early tenders on any date at least three business days after the early tender deadline and before the expiration time. Final settlement for all accepted tenders is expected within two business days following the expiration time.

If the offer is oversubscribed at the early tender deadline, SierraCol will prorate accepted tenders to remain within the $300 million cap. In such a case, tenders submitted after the early deadline may not be accepted. If early tenders do not reach the cap, later tenders may be accepted, also subject to proration.

The tender offer is conditional upon the receipt of sufficient proceeds from a proposed issuance of new senior debt securities. The company has not disclosed the terms or timing of the new issuance. SierraCol retains the right to amend, extend, or terminate the offer at its discretion, subject to applicable law.

Contact Information

Investors and noteholders seeking further details can contact the dealer managers:

Citigroup Global Markets Inc.
Phone: +1 (212) 723-6106 (Collect) / +1 (800) 558-3745 (Toll-Free)
Email: ny.liabilitymanagement@citi.com

Deutsche Bank Securities Inc.
Phone: +1 (212) 250-2955 (Collect) / +1 (866) 627-0391 (Toll-Free)

J.P. Morgan Securities LLC
Phone: +1 (212) 834-7279 (Collect) / +1 (866) 846-2874 (Toll-Free)

Copies of the Offer to Purchase and related documents are available from the information agent:

Global Bondholder Services Corporation (GBSC)
Address: 65 Broadway, Suite 404, New York, NY 10006
Email: contact@gbsc-usa.com
Phone: +1 (212) 430-3774 (Banks and Brokers) / +1 (855) 654-2015 (Toll-Free)

For general inquiries, SierraCol can be reached via its contact page or by phone at +57 (601) 3454155.

Headline image: Oil Pump Courtesy Kobiecanka – Pixabay

The ADRs began trading on the NYSE on July 25, 2024, under the ticker symbol “LTM.” This marks LATAM Airlines Group’s return to the NYSE after its departure in June 2020, which occurred due to a restructuring process under Chapter 11.

As part of the subscription offer, the selling shareholders have granted underwriters a 30-day option to purchase up to an additional 2.85 million ADRs at the initial public offering price. LATAM will not receive any proceeds from the sale of ADRs by the selling shareholders. The offering is expected to close on July 26, 2024, subject to customary closing conditions.

Goldman Sachs & Co. LLC, Barclays Capital Inc., and J.P. Morgan Securities LLC are acting as global coordinators and lead bookrunners for the offering. Citigroup Global Markets Inc., Santander US Capital Markets LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., MUFG Securities Americas Inc., Natixis Securities Americas LLC, and Larraín Vial S.A. are serving as additional bookrunners, with Morgan Stanley & Co. LLC participating as co-manager in the transaction.

Click above to watch and listen!

• Petro’s health reform buried in the Colombian senate
• Geopark (NYSE: GPRK) launches a stock buyback
• Avianca launches flights to Montreal & Paris, but gets fined for unfair competition
• New Colombian Public Debt ETF launched
• Antioquia’s governor asks for public donations to complete highways
• Improvements in the road connecting Medellín to its international airport
• Economic uncertainty affecting foreign investment
• Corrupt prosecutor sent to jail
• Luis Carlos Sarmiento retires from Grupo Aval (NYSE: AVAL)
• Chickens being sacrificed and their blood spattered over Bogotá’s Metro Construction project. See: https://x.com/andreanimalidad/status/1770142966411317525?s=20
• Medellín is fighting back against perverts like Dominick DiVincenzo and Timothy Alan Livingston
  • Medellín’s New Mayor Cracking Down on Vice and Sex Tourism Amid Local Fury
  • Two US Citizens Arrested for the Sexual Exploitation of Minors in Colombia

Construction workers torture chickens on Bogotá Metro project:

#Denuncia🚨 Violencia contra animales (¿santería?) en obra del @MetroBogota @Bogota ‼️

El hecho atroz ocurrió en la Av Boyacá con 1a de mayo. Quién nos envió el video, dice que trabajadores hacen esto cada vez que terminan una etapa de la obra.

Sres @AnimalesBOG @FiscaliaCol… pic.twitter.com/haUm9bNE8A

— Andrea Padilla Villarraga (@andreanimalidad) March 19, 2024

Read more at Finance Colombia https://www.financecolombia.com/

Need to hire bilingual talent? Try EmpleoBilingüe! https://empleobilingue.com/

Consumer Confidence (-22.3%) from Fedesarrollo for December came in slightly higher than the -26.4% expected and represented a modest reversal upwards from November. Both consumer outlook and economic expectations rose slightly.

In terms of propensity to buy, there was a mixed picture with consumer durables slightly better, housing down, and a gap upwards in the appetite to buy vehicles (from -70.1% to -51.6%). From this one number it is hard to draw any conclusions but there appears to be a stubbornness to both the economy and sentiment that few expected at this point.

The latest financial sector numbers for October saw a 1.3% MoM in the overall loan portfolio but analysts are pointing to another sizable increase in provisions and more especially the 3.05% increase in NPLs MoM; one to keep an eye on.

A few weeks ago, I spoke optimistically about the improving weather. In my defense I mentioned the fragility of the situation, and it was clearly a case of heart over head. Since then, I have reported on a disappointing year for the coffee sector and now the rains have returned once again and maybe here for a few months still. President Petro was forced to cut short his trip to Chile in order to visit Cauca where the Pan-American highway has been blocked by landslides, causing tremendous issues for the local population. Again, a situation to keep an eye on.

Later today the Central Bank will release their latest economist survey which will be watched with interest – where will their call be on the terminal interest rate – a week ago we saw JP Morgan move to 13.5%.

Please find below the LinkedIn Video :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-economy-peso-activity-7019637902506631168-SI8s?utm_source=share&utm_medium=member_desktop

That is it for this week – have a restful weekend

Roops

One man who has been busy is President Petro, who yesterday found himself in Santiago with Gabriel Boric discussing regional agreements including energy, but before that he was also in Caracas.

Venezuela matters, make no mistake. Whatever your take on the Maduro regime—presidency is too kind a word—it contains huge potential for Colombia. It will never return to the huge trading partner it was, 2008 being the zenith, but there is much to be done. A commission will meet later this month to look at the 2012 trade agreement that was mothballed and other matters. Energy is also high on the agenda with Colombia’s need for cut price gas matching Venezuela’s need for dollars.

FY 2022 inflation of 13.12% didn’t pass unnoticed in the press, given that it is the basis of so many indexed items. Also we saw JP Morgan publish a report which predicts that interest rates will continue to rise – not to 12.5% as anticipated in recent surveys such as Fedesarrollo or Bloomberg but to 13% – the cycle ending in March. Upcoming surveys will be carefully watched.

Petro’s total peace plans took a blow last week as the ELN, key to stage one, claimed they hadn’t agreed to a bilateral ceasefire – such posturing is very much par for the course and seen regularly in the run up to the FARC agreement, but embarrassing for the government, nonetheless.

This coming week is a quiet one in macro terms with only Fedesarrollo Consumer Confidence, which dropped to -24.8 in December, due on Wednesday and the Central Bank’s economist survey on Friday.

In terms of the markets, the peso will be under the microscope. On Friday it improved 1.5% to $4,855 and with oil starting to catch a bid due to the Chinese re-opening, it could be a decent week for the currency. It is worth noting that both Chile and Peru have seen their own currencies hit six month highs recently.

Please find below Linkedin video :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-business-markets-activity-7018536276958027776-hmz4?utm_source=share&utm_medium=member_desktop

My regards to all

Roops

This year there are 35 winners across five awards categories: Bonds & Loans Lifetime Achievement, Deal of the Year, Bank, Borrower & Legal.

Since 2015, the Bonds & Loans Awards have been recognizing the year’s most innovative and ground-breaking deals from Sovereign, Corporate and Financial Institution issuers and borrowers.

The 2023 Bonds & Loans event will take place November 27^th & 28^th at The Ritz-Carlton Key Biscayne, Miami

Bringing together the industry’s highest profile figures, the Bonds & Loans Latin America & Caribbean awards are an opportunity to raise the profile of the financial markets with the international investment community, and to inspire future issuance by companies.

The exhaustive selection process involves close examination of deal size, tenor, structure, and distribution; analysis and background of the borrower and their accessibility to financing; with extra credit for those deals demonstrating high quality execution, accessing new pools of liquidity, innovative structuring, and opening-up new markets.

GFC Media says that this year’s winners are a testament to the leadership demonstrated by Latin America and The Caribbean’s finance and investment community, which has successfully navigated through a ground-breaking year.

Presentation of the awards took place after the second day of the Bonds & Loans Latin America & Caribbean event, on November 2022 at The Ritz-Carlton Coconut Grove, Miami.

2022 AWARD WINNERS:

Bonds & Loans Lifetime Achievement Award:

• Carlos Garcia Moreno, Chief Financial Officer, America Movil

Sovereign Bond Deal of the Year:

• The Republic of Chile
• USD 2bn SEC Registered Sustainability-Linked Bond at 4.340%
• Issued: March 2022; Matures: March 2042
• JLMs/Bookrunners: BNP Paribas, Credit Agricole CIB, Societe Generale
• Legal Advisers to Issuer: Linklaters, Morales & Besa
• Legal Adviser to the JLMs: Cleary Gottlieb, Garrigues

Agency Bond Deal of the Year:

• CABEI
• MXN 5bn Floating Rate Notes at 3.98%
• Issued: June 2021; Matures: June 2024
• JLMs/Bookrunners: BBVA, HSBC
• Legal Advisers to Issuer: Shearman & Sterling, Ritch Mueller

Investment Grade Corporate Bond Deal of the Year:

• Sitios (America Movil)
• USD 1bn 144a/RegS Senior Unsecured Bond at 5.375%
• Issued: March 2022; Matures: April 2032
• Global Coordinators: Citi, JPMorgan
• JLMs/Bookrunners: Citi, Barclays, BBVA, BofA Securities, JP Morgan, Scotiabank
• Legal Advisers to Issuer: Cleary Gottlieb, Bufete Robles Miaja
• Legal Adviser to the JLMs: Ritch Mueller, Simpson Thacher & Bartlett

High Yield Corporate Bond Deal of the Year:

• Comunicaciones Celulares S.A. (Millicom, Comcel)
• USD 900m 144a/RegS 10NC5 Senior Secured Guaranteed Notes at 5.125% to finance Millicom’s acquisition of the remaining 45% equity stake in Comcel
• Issued: January 2022; Matures: January 2032
• Global Coordinators: Goldman Sachs, JP Morgan
• JLMs/Bookrunners: Goldman Sachs, JP Morgan, Scotiabank
• Legal Advisers to Issuer: Davis Polk & Wardwell, Consortium Legal
• Legal Adviser to the JLMs: Milbank, Cuestas PPQ

Hybrid Bond Deal of the Year:

• CEMEX
• USD 1bn 144a/RegS Hybrid Perpetual NC5.25 Notes at 5.125%
• Issued: June 2021; Matures: PerpNC5.25
• JLMs/Bookrunners: Citi, BofA Securities, HSBC
• Legal Advisers to Issuer: Skadden
• Legal Adviser to the JLMs: Cleary Gottlieb

Sovereign Liability Management Deal of the Year:

• The Dominican Republic
• DOP 110bn 144a/RegS (with permanent restrictions and concurrently offered via local auction) Senior Unsecured Dual-tranche Bonds at 8.0% and 8.625%
• Issued: June 2021; Matures: June 2028 and 2031
• JLMs/Bookrunners: Citi, JP Morgan
• Legal Advisers to Issuer: Cleary Gottlieb
• Legal Adviser to the JLMs: Simpson Thacher & Bartlett

Corporate Liability Management Deal of the Year:

• PEMEX
• USD 1bn 144a/RegS Bonds and USD 5.814bn Exchange/Tender Offer at 6.70%
• Issued: December 2021; Matures: February 2023
• Bookrunners: BofA Securities, Citi, Goldman Sachs, HSBC
• Legal Advisers to the Issuer: Cleary Gottlieb
• Legal Advisers to the Bookrunners: Shearman & Sterling, Ritch Mueller

Sovereign Restructuring Deal of the Year:

• The Republic of Belize
• USD 553m Blue Loan (USD364m Blue Loan used to retire USD553m Superbond with coupon of 3.0% at 55c to USD)
• Settled: September 2021
• Financial Adviser: Citi
• Legal Advisers to Issuer/Borrower: Sullivan & Cromwell
• Legal Adviser to the JLMs: David Polk

Corporate Restructuring Deal of the Year:

• Cinepolis
• USD 1.6bn MXN, USD, EUR, BRL and PEN Multi-Currency Debt Restructuring (Covenant Holiday and 2-Year Tenor Extension) and USD 200m New Term Loan Facility
• Settled: July 2021; Matures: July 2028
• Obligor’s Adviser: Lazard
• Lenders’ Advisor: FTI Consulting
• Legal Adviser to the Obligor: Skadden, Galicia
• Legal Advisers to the Lenders: Milbank, Creel García Cuellar

Syndicated Loan Deal of the Year:

• KKR (Project Alameda)
• USD 460m 4-tranche syndicated loan (USD 230m Term Loan, USD 140m Capex, USD 11m Revolving Credit, and USD 55m VAT Facilities) for the acquisition of 60% of Telefonica Chile’s Fiber Optic Network
• Issued: July 2021; Matures: July 2027
• Global Coordinators: Scotiabank, KKR Capital Markets
• Bookrunners: Scotiabank, KKR Capital Markets
• Legal Advisers to the Borrowers: Simpson Thacher & Barlett, CM Carey & Allende
• Legal Advisers to the Bookrunners: Allen & Overy, PPU

Mid-Cap Loan Deal of the Year:

• Lifemiles
• USD 400m Term Loan B
• Issued: August 2020; Matures: March 2026
• Bookrunners: Citi, Morgan Stanley

Leveraged Finance Deal of the Year:

• Mubadala Capital
• USD 1.8bn 144a/RegS Senior Secured Bonds at 7.25%
• Issued: July 2021; Matures: June 2031
• Global Coordinators and Bookrunners: Bradesco BBI, JPMorgan, HSBC, Societe Generale, Standard Chartered, UBS
• Bookrunners: Deutsche Bank
• Legal Advisers to Issuer: Skadden
• Legal Adviser to the JLMs: Milbank, Machado Meyer

Acquisition Finance Deal of the Year:

• Ecopetrol
• USD 3.8bn Bridge Loan for the Acquisition of ISA
• Issued: November 2021; Matures: November 2023
• Bookrunners: Citi, JPMorgan, Santander, Scotiabank
• Legal Advisers to the Borrower: Shearman & Sterling, Baker McKenzie
• Legal Advisers to the JLMs/Bookrunners: Milbank, Gomez Pinzon & Asociados

Project Finance Deal of the Year:

• Tocumen
• USD 1.855bn 144a/RegS Senior Secured Dual-Tranche Project Bond at 4.0% and 5.125%
• Issued: August 2021; Matures August 2041 and August 2061
• Bookrunners/JLMs: Citi, BofA Securities
• Legal Advisers to the Issuer: Shearman & Sterling, Icaza, González Ruiz & Alemán
• Legal Advisers to the JLMs: Milbank, Aleman Cordero Galindo & Lee

ESG Bond Deal of the Year:

• The Central America Bottling Corporation
• USD 1.1bn 144a/RegS Sustainability-Linked Bond at 5.25%
• Issued January 2022; Matures: April 2029
• Global Coordinators: Citi, JP Morgan
• JLMs/Bookrunners: Citi, JP Morgan
• Legal Advisers to Issuer: Hogan Lovells, Walkers, Palacios y Asociados
• Legal Adviser to the JLMs: Shearman & Sterling, Harney Westwood & Riegels, Atla Qil, Uria Menendez

ESG Loan Deal of the Year:

• CEMEX
• USD 3.25bn Sustainability-Linked Dual-tranche Credit Facility
• Issued: October 2021; Matures: October 2026
• Bookrunners: BNP Paribas, Banamex, Citi, BofA Securities, JP Morgan
• Legal Advisers to the Borrower: Skadden, GHR Rechtsanwalte
• Legal Adviser to the Bookrunners: Cleary Gottlieb, Galicia

BRL Deal of the Year:

• BNDES + VALE
• BRL 11.5bn 144a/RegS and ICVM 476 Senior Unsecured Dual-tranche Debenture
• Issued: April 2021
• Bookrunners: Bradesco, Citi, Itau BBA, JP Morgan
• Legal Advisers to the Issuer: Cleary Gottlieb Steen & Hamilton, Pinheiro Guimaraer Advogados
• Legal Adviser to the Bookrunners: Mattos Filho Veiga Filho Marrey Jr e Quiroga

MXN Deal of the Year:

• Grupo Aeroportuario del Centro Norte (OMA)
• MXN 5bn Dual Tranche 5-year Sustainability-Linked Floating Rate Note and 7-year Sustainability-Linked Fixed Rate Note at 6.87% and 9.35%
• Issued: March 2022; Matures: March 2027 and March 2029
• JLMs/Bookrunners: Citi, HSBC, Santander
• Legal Advisers to Issuer: Mijares, Angoitia, Cortés y Fuentes

COP Deal of the Year:

• Sacyr Concesiones
• USD798m 144s/RegS Project Bonds at 6.60% and Secured Loans
• Issued: February 2022; Matures: February 2041, May 2030, May 2037, April 2030
• Global Coordinators and Bookrunners: Goldman Sachs, JP Morgan
• Legal Advisers to Borrower/Sponsors: Clifford Chance, Posse Herrera
• Legal Adviser to the JLMs: Latham & Watkins, Philippi Prietocarrizosa, Perez Bustamante & Ponce, Uria Menendez

PEN Deal of the Year:

• Multimercados Zonales (Minka)
• PEN 135m Private Placement Securitisation Bonds at 7.969%
• Issued: November 2021; Matures: November 2041
• Bookrunner: Scotiabank
• Legal Adviser to the JLMs: Rodrigo Elias & Medrano

CLP Deal of the Year:

• Digital Bridge (Project Ocean)
• CLP 205bn Term Loan Facility for Digital Bridge’s acquisition of 100% stake of Pacífico Cable
• Issued: March 2022; Matures: March 2027
• Bookrunners: Scotiabank
• Legal Advisers to the Borrower: Vinson & Elkins, Carey
• Legal Advisers to the JLMs/Bookrunners: Allen & Overy, PPU

Bond House of the Year:

• JP Morgan

Loan House of the Year:

• Citi

Structured Finance Bank of the Year:

• Citi

Project Finance Bank of the Year:

• SMBC

ESG/Sustainable Finance Adviser of the Year:

• BNP Paribas

Brazilian Investment Bank of the Year:

• Itau BBA

Mexican Investment Bank of the Year:

• Santander

Andean Investment Bank of the Year:

• Scotiabank

Sovereign Funding Team of the Year:

• Ministry of Finance, Republic of Mexico

Corporate Funding Team of the Year:

• America Movil

Bank Funding Team of the Year:

• Corporación Andina de Fomento (CAF)

Banking & Finance Legal Adviser of the Year:

• Skadden

Debt Capital Markets Legal Adviser of the Year:

• Milbank

Since 2015 the Bonds & Loans Awards has been recognizing the most innovative and ground-breaking deals from Sovereign, Corporate and Financial Institution issuers and borrowers. This year, GFC Media Group is delighted to announce that for the first time they will be recognizing the outstanding achievements of Investment Banks’ Deal Teams, Funding Teams, Investment Managers, and Legal Advisers.

This year’s awards ceremony is a testament to the leadership demonstrated by the Latin American & Caribbean finance and investment community, which has successfully navigated through this most turbulent and ground-breaking year.

Following a rigorous selection process, GFC Media Group has announced the Bonds & Loans Latin America & Caribbean Awards 2021 winners.

Deals of the Year WINNERS:

• Sovereign, Supra & Agency Bond Deal of the Year: Republic of Peru
• Investment Grade Corporate Bond Deal of the Year: Coca-Cola FEMSA
• High Yield Corporate Bond Deal of the Year: Mercado Libre
• Hybrid Bond Deal of the Year: CEMEX
• Private Placement Deal of the Year: ATP Tower Holdings
• Liability Management Deal of the Year: United Mexican States
• Structured Finance Deal of the Year: Grupo Elektra
• Syndicated Loan Deal of the Year: Tecnoglass
• Local Currency Deal of the Year: Azul
• Leveraged & Acquisition Finance Deal of the Year: Northland Power
• Project Finance Deal of the Year: EnfraGen
• ESG & Sustainable Finance Deal of the Year: Klabin
• Ground-Breaking Deal of the Year: Suzano

Bank Awards WINNERS:

• Bond House of the Year: J.P. Morgan
• Loan House of the Year: Mizuho
• Structured Finance House of the Year: Goldman Sachs
• Project Finance House of the Year: Sumitomo Mitsui Banking Corporation (SMBC)
• ESG/Sustainable Finance Adviser of the Year: Morgan Stanley

Borrower Awards WINNERS:

• Sovereign Funding Team of the Year: Republic of Chile
• Corporate Funding Team of the Year: Suzano
• Bank Funding Team of the Year: CABEI

Legal Awards WINNERS:

• Banking & Finance Legal Adviser of the Year: Milbank
• Capital Markets Legal Adviser of the Year: Cleary Gottlieb Steen and Hamilton

To join the LatAm & Caribbean industry’s most high-profile figures at the Bonds & Loans Latin America & Caribbean AWARDS ceremony, book your table here today: https://na.eventscloud.com/ereg/index.php?eventid=619953& or contact Andrew Stark on Andrew.Stark@GFCMediaGroup.com

The move further weakens Colombia’s precarious financial position brought on by the COVID-19 pandemic, causing an almost 7% contraction in the country’s economy. Colombia counts heavily on both exports of petroleum and imports of international tourists; both sectors hurt badly by worldwide COVID restrictions on travel and discretionary consumption.

S&P: “We believe Colombia’s fiscal adjustment will prove to be more protracted and gradual than previously expected, diminishing the likelihood of reversing the recent deterioration in public finances.”

According to JP Morgan’s Katherine Marney, Fitch may likely downgrade Colombia as well, as the country already sits at the firm’s lowest investment grade before junk. There is also a danger of government owned entities with their own credit ratings being downgraded as well.

The downgrade can trigger investment selloff and hinder the ability of Colombia and Colombian firms to borrow money as many investment vehicles may only invest in quality (investment grade) debt.

“On the issue of eggs, it depends on its quality. Let’s say $1,800 COP (48 cents, US) a dozen or something like that.” – Sacked Colombian Finance Minister Alberto Carrasquilla

The downgrade comes after Colombian President Ivan Duque failed to have his fiscal reform package passed—or even considered in the Colombian congress after massive protests erupted in the country. Then Finance Minister Alberto Carrasquilla had taken to the airwaves to sell the package to the country, but stumbled badly when he had no idea how much a dozen eggs cost—he guessed less than $0.50 US—and couldn’t articulately describe why the administration in the tax reform he authored imposed taxes on basic staples like eggs & rice, while leaving sugared soft drinks exempt (hint: the owners of Colombia’s 2 largest domestic soft drink brands are Duque administration supporters).

In response to the initial, mostly peaceful and organized strike, Duque sent out national riot police who violently attempted to disrupt the protests. This had the reverse effect, and deeply angered even many who were not participating in the initial strikes or protests, and large swaths of the country quickly descended into violence and chaos. The international airport to Cali had to temporarily close, and the country still faces supply disruptions and road blockages.

With presidential elections next year and Duque’s political capital completely exhausted, it is difficult to see how a plan that can adequately shore up Colombia’s dangerous deficit can be passed in the remaining months of Duque’s presidency.

On Wednesday, Standard & Poor issued a statement saying (in part) the following:

Rating Action

S&P Global Ratings lowered its long-term foreign currency sovereign credit rating on Colombia to ‘BB+’ from ‘BBB-‘ and its long-term local currency rating to ‘BBB-‘ from ‘BBB’. The outlook on our long-term ratings is stable. We also lowered our short-term foreign currency rating to ‘B’ from ‘A-3’ and our short-term local currency rating to ‘A-3’ from ‘A-2’.

S&P: “We believe that fiscal adjustment will prove to be more protracted and gradual than previously expected, diminishing the likelihood of reversing the recent deterioration in public finances. We therefore lowered our long-term foreign currency rating on Colombia to ‘BB+’ from ‘BBB-‘.”

We revised down Colombia’s transfer and convertibility assessment to ‘BBB’.

Outlook

The stable outlook reflects our expectation of economic recovery in 2021 following the significant contraction last year. The combination of renewed GDP growth and certain fiscal measures is likely to gradually curtail Colombia’s fiscal deficits, resulting in net general government debt stabilizing above 60% of GDP. The stable outlook also incorporates our expectation for an institutional solution to recent and significant social unrest, which would result in prospects for political and institutional stability for the medium to long term.

Downside scenario

We could lower our ratings on Colombia in the next 12 to 18 months if the potential long-term damage caused by the pandemic, other domestic developments, or new external shocks prevent the Colombian economy from recovering in 2021 and result in lower-than-expected GDP growth in subsequent years. Such a scenario would most likely result in consistently higher fiscal deficits than currently projected and a steady increase in the government’s debt burden, leading to a downgrade. A perceived deterioration in Colombia’s institutional effectiveness, evidenced by an inability to form political and social consensus to sustain growth and its fiscal profile, could also lead to a downgrade.

Upside scenario

We could raise our ratings on Colombia within the next 12 to 18 months if economic growth is faster than expected, coupled with structural fiscal measures that reduce Colombia’s fiscal financing gap, lower the debt burden, and strengthen public finances. A larger and more diverse export sector, helping to reduce external vulnerability and strengthen economic resilience, could also lead to an upgrade over the medium to long term.

Rationale

The downgrades follow the withdrawal of a fiscal reform introduced to Congress in a context of high spending pressures, which has resulted in a significantly lower likelihood of Colombia improving its fiscal position following a recent and marked deterioration. Given the country’s high external vulnerability and moderate economic profile (balanced by adequate institutions and monetary credibility), in our view Colombia’s debt levels, stabilizing at about 60% of GDP during 2021-2024, and relatively large fiscal deficits are no longer consistent with an investment-grade (‘BBB-‘ or higher) foreign currency rating.

S&P: “The outlook is stable, reflecting our view that economic recovery, coupled with certain fiscal measures, will stabilize the government’s recently worsening debt burden over the coming two to three years.”

An ambitious fiscal reform proposal presented to Congress on April 15, 2021, aimed to finance transitory and structural higher spending–mainly transfers to the most vulnerable segments of the population–while helping to consolidate fiscal deficits. The fiscal reform was expected to be diluted during the Congress debate but to yield some additional and permanent current revenue. Instead, it was met by marked political opposition and protests from some segments of the population. While the larger protests since April 28 have been mostly peaceful, some violence has also occurred. These developments forced the government to withdraw the fiscal reform proposal by May 2, 2021.

The government, under new leadership at the Ministry of Finance, is looking to conciliate with various groups participating in the protests, as well as other social groups, and garner political support across party lines to make an alternate fiscal policy proposal. Prospects for substantial structural reforms are low in the near term, given ongoing protests and the approach of national elections next year. COVID-19 exacerbated the weakness in Colombia’s fiscal profile, though the worsening trend was present for most of the past decade. Moreover, as in many other emerging markets, the pandemic showed the substantial weakness of the country’s safety nets, which will most likely drive spending growth over the long term.

The COVID-19 pandemic and its related economic contraction significantly widened Colombia’s fiscal deficit. Discounting the transitory fiscal impact of the economic contraction and absent structural fiscal improvements, we expect the change in net general government to be 3%-4% of GDP in 2021-2024. Conversely, renewed economic growth should contribute to stabilizing net general government debt at about 60% of GDP during 2021-2024, compared with 43% in 2019. The general government interest burden is expected at just below 15% of general government revenue for 2021-2024.

Colombia’s rating fundamentals remain weaker than those of similarly rated peers. That said, in our opinion, Colombia’s flexible credit line with the IMF, our expectation of adequate access to the international debt markets, and a credible and efficient monetary policy continue to mitigate external risks and support Colombia’s creditworthiness.

Image by David Mark from Pixabay

The new bonds offering is being made by means of a preliminary prospectus supplement and an accompanying base prospectus.  Copies of the preliminary prospectus supplement and the related prospectus for the new bonds offering may be obtained by contacting Credit Suisse Securities, by calling +1-800-820-1653 (US toll free); Deutsche Bank Securities Inc. by calling +1-800-503-4611 (US toll free); or J.P. Morgan Securities LLC, by calling +1-866-846-2874 (US toll free).

Application will be made to have the new bonds listed on the Luxembourg Stock Exchange and admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange.

Tender Offer

Colombia also announced that it has commenced an offer to purchase for cash its outstanding 4.375% Global Bonds due 2021, 4.000% Global Bonds due 2024, 4.500% Global Bonds due 2026, and 3.875% Global Bonds due 2027, as each such series is described further in the table below in an aggregate principal amount that will not result in an aggregate purchase price that exceeds an amount determined by Colombia.  The tender offer is made on the terms and subject to the conditions contained in the offer to purchase, dated January 12, 2021, including the pricing of the issue of the new bonds in an amount and on terms and subject to conditions acceptable to the issuer.

The tender period will commence at 8:00 a.m., New York time, on Tuesday, January 12, 2021, and, unless extended or earlier terminated by Colombia, the tender period will expire for simple tenders at 12:30 p.m., New York City time, and for reinvestment tenders, at 3:00 p.m., New York City time, on Tuesday, January 12, 2021.

Colombia expects to announce the maximum purchase amount, the aggregate principal amount of reinvestment tenders and of simple tenders of the old bonds that have been accepted and whether any proration has occurred for any series of old bonds on Wednesday, January 13, 2021.  The settlement of the tender offer is scheduled to occur on Wednesday, January 20, 2021 but is subject to change without notice.

The purchase price to be paid for the old bonds that are tendered and accepted pursuant to the tender offer will be the fixed price identified for each series of old bonds set forth in the table below.  Holders of the old bonds participating in the tender offer will also receive any accrued and unpaid interest on their old bonds up to the tender offer settlement date.

Old Bonds

During the tender period, a holder of old bonds may place orders to tender old bonds only through any of the dealer managers.  If a holder does not have an account with a dealer manager and desires to tender its old bonds, it may do so through a broker, dealer, commercial bank, trust company, other financial institution or other custodian, in each case that has an account with a dealer manager.  Holders will not be able to submit tenders through Euroclear Bank SA/NV, Clearstream Banking, S.A. or the Depository Trust Company system.  J.P. Morgan Securities LLC, as the billing and delivering bank for the tender offer, will consolidate all tender orders and accept old bonds for purchase pursuant to the terms and conditions in the offer to purchase on behalf of Colombia, subject to proration at Colombia’s discretion and other terms and conditions as described in the offer to purchase, on Tuesday, January 12, 2021 or as soon as possible thereafter.

Failure to deliver old bonds on time may result in: the cancellation of a holder’s tender and the holder becoming liable for any damages resulting from that failure, the delivery of a buy-in notice for the purchase of such old bonds, executed in accordance with customary brokerage practices for corporate fixed income securities, and in the case of reinvestment tenders, the cancellation of a holder’s tender and the holder remaining obligated to purchase its allocation of 2031 Bonds in respect of its related Indication of Interest.

Tender orders for any series of old bonds may be subject to proration at Colombia’s discretion.  To the extent proration occurs for any series of old bonds, the billing and delivering bank will accept old bonds with appropriate adjustments to avoid the purchase of old bonds in principal amounts other than permitted tender amounts.  Tender orders for the 2021 bonds will be accepted before tender orders for any other series of old bonds.  After the consummation of the offer and prior to the stated maturity of the 2021 bonds, Colombia may seek to redeem, in accordance with their terms, some or all of the 2021 bonds that remain outstanding.

Each holder submitting tender orders shall be deemed to represent to Colombia, the dealer managers and the billing and delivering bank that such holder held, from the time of its submission of its tender order through the expiration time, at least the amount of old bonds that are being tendered.

All old bonds that are tendered pursuant to tender orders and are accepted by Colombia will be purchased on behalf of Colombia by the billing and delivering bank directly or, if the tendering holder does not have an account with the billing and delivering bank, through the dealer manager with which such holder placed a tender order, or through the broker, dealer, commercial bank, trust company, other financial institution, or other custodian that has an account with a dealer manager, with which such holder placed a tender order.  There is no letter of transmittal for the tender offer.  old bonds held through DTC must be delivered for settlement no later than 3:00 p.m., New York City time, on the tender offer settlement date.  If a holder holds old bonds through Euroclear or Clearstream, the latest process it can use to deliver its old bonds is the overnight process, one day prior to the settlement date; holders may not use the optional daylight process.  Holders will not have withdrawal rights with respect to any tenders of old bonds in the tender offer.  old bonds accepted for purchase will be settled on a delivery versus payment basis in accordance with customary brokerage practices for corporate fixed income securities.

Colombia may, but is not required to, issue and sell 2031 Bonds to holders who validly tender their old bonds pursuant to the tender offer and place firm orders for 2031 Bonds during the tender period (as well as investors that are not participating in the tender offer).  If Colombia determines to issue and sell 2031 Bonds to such holders, the scheduled settlement date for the new bonds is expected to occur on Friday, January 22, 2021.

The tender offer is subject to Colombia’s right to extend, terminate, withdraw, or amend the tender offer at any time.  Colombia reserves the right not to accept tenders for any reason.

The offer to purchase may be downloaded from the Information Agent’s website at www.dfking.com/colombia or obtained from the Information Agent, D.F. King & Co., Inc., at 1-877-896-3199 or from any of the dealer managers.

The dealer managers for the tender offer are:

The billing and delivering bank for this tender offer is: J.P. Morgan Securities LLC.