UPDATE 1-Colombia returns to euros after 15-year hiatus

miércoles 16 de marzo de 2016 16:29 GYT
 

(Changes throughout)

By Paul Kilby

NEW YORK, March 16 (IFR) - Colombia returned to the euro bond market for the first time in 15 years on Wednesday with a 1.35bn (US$1.50bn) 10-year issue that wrapped up its external funding needs for the year.

The South American country follows a string of sovereign peers - including Mexico, Peru and Chile - which have raised funding in Europe this year to lock in rock-bottom nominal coupons among yield-hungry investors.

The move comes just as the European Central Bank embarks on another round of monetary easing, including the monthly bond buying that could push European yields deeper into negative territory.

Against that backdrop, European insurance companies and other investors have taken a liking to emerging market debt as they scramble to hit yield targets.

With books peaking at north of 3.5bn, leads BBVA, Goldman Sachs and JP Morgan were able to squeeze pricing by 25bp before landing the deal at par to yield 3.875%, inside initial thoughts of 4.125% area and 4% area guidance.

That sub 4% yield is a far cry from the Andean nation's last trip to the euro market in 2001, when it was a junk rated sovereign that paid a 11.177% yield for seven-year money.

Yet while Colombia is now rated Baa2/BBB/BBB, the oil exporter's spreads have come under considerable pressure during this year's rout in crude prices and this was reflected in pricing levels relative to its Latin American peers.   Continuación...