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COLOMBIA: Bonilla Says Government Plans To Apply For New IMF Credit Line

COLOMBIA
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  • Finance Minister Bonilla said yesterday that the government plans to reduce its debt costs by applying for a new credit line from the IMF. Bonilla said that the government is currently paying 4-4.5% interest on IMF loans, while interest on loans from multilateral organisations is 5.5-6% and interest payments to bondholders exceed 8%. Bonilla will attend the IMF meetings next week where he will discuss the matter with the IMF.
  • Data wise, no macro releases are expected today, with the next publication being August economic activity tomorrow, where a moderation in growth to 1.6% y/y, from 3.7% is expected. The weak growth backdrop is expected to prompt an acceleration in the easing cycle later this month. To recap, yesterday’s BanRep economist survey revealed that a majority of analysts expect the central bank to deliver a 75bp cut at the Oct 31 MPC meeting, as the year-end CPI estimate was also reduced by 10bp to 5.50%.
  • In other news, Ecopetrol sold $1.75bn in bonds maturing in 2032 priced at a yield of 7.8% yesterday, with proceeds to be used to fund the repurchase of bonds due in 2026 and repay a portion of a 2030 loan. Ecopetrol also said that it would offer a premium to repurchase as much as $1.25bn of the 2026 bonds.
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  • Finance Minister Bonilla said yesterday that the government plans to reduce its debt costs by applying for a new credit line from the IMF. Bonilla said that the government is currently paying 4-4.5% interest on IMF loans, while interest on loans from multilateral organisations is 5.5-6% and interest payments to bondholders exceed 8%. Bonilla will attend the IMF meetings next week where he will discuss the matter with the IMF.
  • Data wise, no macro releases are expected today, with the next publication being August economic activity tomorrow, where a moderation in growth to 1.6% y/y, from 3.7% is expected. The weak growth backdrop is expected to prompt an acceleration in the easing cycle later this month. To recap, yesterday’s BanRep economist survey revealed that a majority of analysts expect the central bank to deliver a 75bp cut at the Oct 31 MPC meeting, as the year-end CPI estimate was also reduced by 10bp to 5.50%.
  • In other news, Ecopetrol sold $1.75bn in bonds maturing in 2032 priced at a yield of 7.8% yesterday, with proceeds to be used to fund the repurchase of bonds due in 2026 and repay a portion of a 2030 loan. Ecopetrol also said that it would offer a premium to repurchase as much as $1.25bn of the 2026 bonds.