UPDATE 2-Colombia to swap inflation-linked, fixed rate bonds next week

viernes 26 de septiembre de 2014 19:55 GYT
 

(New throughout, adds confirmation of swap)

BOGOTA, Sept 26 (Reuters) - Colombia will conduct a swap of peso-denominated bonds next week, including fixed rate and inflation-linked paper, and another by November worth 1.5 trillion pesos ($742.6 million) within the Treasury department, the finance ministry said on Friday.

The government will on Wednesday offer the market an exchange of fixed-rate bonds, known as TES, that mature in October 2015 and October 2018 for similar bonds that mature between 2017 and 2026, Michel Janna, head of the public credit office said, confirming an earlier report by Reuters.

Inflation-linked bonds that mature in February 2015 will also be exchanged for similar bonds with a longer maturity. The size of the market swap will depend on conditions, he said.

Two sources told Reuters earlier that the fixed rate bonds would be swapped for paper that come due in September 2019, July 2020, July 2024 and August 2026.

Finances have become a concern for the government in recent months after a decline this year in output of crude oil, the nation's biggest export, cut earnings from royalties that flow into the $370 billion economy.

Finance Minister Mauricio Cardenas this week proposed shifting about $1.5 billion (3 trillion pesos) from the debt servicing and public administration portion of the 2015 budget to fund increased investment in infrastructure and social spending.

"The objective of the nation is clearly to be able to extend the average life of its debt..to reduce the risks of refinancing for 2015," Janna told reporters.

"It clearly helps with the aim of finding resources for the financing of the investment portion of the budget," he said.

The government wants to reduce the number of debt issuances and amortizations next year.

The Treasury department will swap 1.5 trillion pesos of TES that come due in February 2015, October 2015 and October 2018. Janna did not say what maturities the bonds would be swapped for. (Reporting By Dave Gregorio)