Bloomberg News

Colombia’s Peso Bond Yields Rise on European Debt Concern

October 11, 2011

Oct. 11 (Bloomberg) -- Colombia’s peso bonds fell, pushing yields higher for the first day in six, amid concern European officials may fail to halt the region’s sovereign-debt crisis before it spreads to banks.

The yield on Colombia’s benchmark 10 percent bonds due in July 2024 rose three basis points, or 0.03 percentage point, to 7.49 percent. The bond’s price fell 0.233 centavo to 120.185 centavos per peso.

European Central Bank President Jean-Claude Trichet warned of threats to the financial system as the conflict among political leaders intensified over how to extricate Europe from the debt crisis. Trichet’s message came before Slovakian lawmakers voted on the euro region’s retooled bailout fund. While Slovakia’s largest opposition party rejected the measure in a first vote today, Finance Minister Ivan Miklos said the revamped fund will likely be passed in a separate vote later this week.

“Everyone’s focused on what may come out of Europe,” said Francisco Chaves, an analyst at Bogota-based brokerage Corredores Asociados SA. “Just as we had gains in the market yesterday, today we see some corrections amid concern on how this continues to evolve.”

The peso rose 1.2 percent to 1,914.75 per U.S. dollar, from 1,936.90 yesterday. It has dropped 6.1 percent in the last month, the worst performance after the Chilean peso among the six most traded currencies in Latin America.

--Editor: Marie-France Han

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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