Colombia Completes Record $39.04 Billion Debt Exchange
Colombia has successfully completed it’s largest-ever debt exchange, swapping approximately $39.04 billion in existing bonds for new ones, the Ministry of Finance announced today. The operation, finalized on February 29, 2024, aims to reduce the country’s net debt-to-GDP ratio, improve its fiscal position, and lower refinancing risks.
The exchange involved two offerings: a debt exchange targeting bonds maturing between August 22, 2029, and October 26, 2050, totaling $21.14 billion, and another focused on bonds maturing January 24, 2035, March 13, 2058, and others, amounting to $17.90 billion. Participation rates were 23.9% for the first offering and 32.9% for the second, with overall participation reaching 100% in both. The exchange offers included rates ranging from 7,250% to 12,000% and involved a total of 210,671 and 107,655 titles delivered by the nation, respectively.
This move comes as Colombia seeks to strengthen its economic standing and manage its debt obligations more effectively. “With the execution of this operation, we consolidate the reduction of the net debt to GDP ratio, we generate a positive fiscal effect in 2025 and we ostensibly reduce the refinancing risk of the Nation for the following periods,” said Javier Cuéllar, Director of Public Credit and Treasury. The debt exchange is expected to have a important impact on Colombia’s financial stability and its ability to invest in key economic sectors.