Bloomberg News

Colombia Bond Yields Rise as Interbolsa Collapse Sparks Sales

November 09, 2012

Colombia’s peso bond yields rose the most in a week as investors sold local financial assets as they seek liquidity after the collapse of the Andean nation’s biggest brokerage.

The yield on 10 percent peso-denominated debt due in July 2024 rose six basis points, or 0.06 percentage point, to 6.23 percent, according to the central bank. The price fell 0.545 centavo to 130.62 centavos per peso.

Finance Minister Mauricio Cardenas said Nov. 7 that regulators will liquidate Interbolsa SA’s brokerage after it failed to meet a loan payment last week. The yield on the government bonds due July 2024 has risen six basis points and the benchmark Colcap stock index dropped 3.5 percent this month, after Interbolsa said Nov. 1 it was facing a funding squeeze.

“The market is very volatile given all that’s happening with Interbolsa,” said William Florez, an analyst at Helm Bank SA (PFBHELMB)’s brokerage in Bogota. “The question is how much will need to be sold in shares and bonds as people seek liquidity.”

Following the collapse on Interbolsa’s brokerage, Colombia’s central bank began offering this week 300 billion pesos ($165 million) of 14-day repurchase agreements to boost liquidity, accepting securities including corporate bonds as collateral. None of the repos were taken by investors today, while 4 billion pesos worth were taken yesterday.

The peso dropped 0.3 percent to 1,815.35 per U.S. dollar. The currency gained 0.6 percent this week and has jumped 6.8 percent this year.

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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