Bloomberg News

Colombia Yields Fall to 3-Week Low on European Pledge for Banks

October 10, 2011

Oct. 10 (Bloomberg) -- Colombia’s peso bonds rose, pushing yields on benchmark securities to a three-week low, after a pledge by French and German leaders to deliver a plan to support banks led to increased appetite for higher-yielding, emerging- market assets.

The yield on Colombia’s benchmark 10 percent bonds due in July 2024 fell 13 basis points, or 0.13 percentage point, to 7.46 percent. That’s its lowest level on a closing basis since Sept. 20. The bond’s price climbed 1.141 centavos to 120.464 centavos per peso.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said in Berlin yesterday they have given themselves three weeks to devise a plan to recapitalize banks and find a “durable” solution for Greece’s debt load.

“Markets are somewhat optimistic on the bank plan,” said Camilo Perez, head analyst at Banco de Bogota SA, Colombia’s second-biggest bank.

Colombia’s peso jumped 1.1 percent to 1,914 per U.S. dollar in the next-day market, according to the stock exchange’s foreign-exchange electronic transactions system, known as SET- FX. Because of the Columbus Day holiday in the U.S., Colombia’s currency trades in the so-called next-day market, in which payment and delivery are made the following trading day.

--Editors: Glenn J. Kalinoski, Richard Richtmyer

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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