May 23, 2024 12:21 GMT
Pension Reform Progresses, Moody’s Cuts Ecopetrol To Ba1
COLOMBIA
- The government’s pension reform is continuing to progress through the lower house of congress, with 68 out of the 95 articles being approved so far. This includes allowing the threshold of worker contributions that the government will receive to 2.3 minimum wages, with private fund managers managing contributions above that amount. Analysts note that the article defining BanRep as the administrator of the savings fund has not yet been approved. Discussion on the pension reform in the lower house will continue, although a date for the next debate has not yet been set.
- In other news, Moody’s has cut Ecopetrol's long-term rating to Ba1 from Baa3, with a stable outlook. Moody’s said that the downgrade reflected a shift in Ecopetrol’s financial policy as leverage has risen, which along with ongoing dividend payouts and upcoming ambitious capital investment plans could erode the company's liquidity position or lead to higher indebtedness. The move brings Moody’s in line with Fitch and S&P, which both rate the company at BB+.
- No macro data are due today, with April unemployment the next release to note, at month-end.
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