Tuesday, October 13, 2009

The Debts of the World: Colombia Offers Dollar Denominated Bonds

All aboard the dollar carry trade train! Weeks after the German government decided to issue dollar denominated bonds, a slew of European nations also decided to follow on board. Even countries like Venezuela have followed.

Now, Colombia is the latest country to join this global arbitrage game of selling dollars. As I said before, the issuance of dollar denominated bonds is a very attractive factor for US fund managers seeking to gain foreign exposure whil e retaining currency risk at a minimum.

BOGOTA (Dow Jones)--Colombia is offering as much as $1 billion in dollar-denominated global sovereign bond maturing in 2041, according to investors familiar with the offering. Felipe Munoz, who manages a fund of dollar-denominated bonds with Colombian brokerage Corredores Asociados, said, "Demand for the bonds will be heavy."

The government will use the proceeds to finance its 2010 budget, according to a term sheet sent to investors. Banc of America Securities and Goldman Sachs (GS) are underwriting the sale. The bonds will be listed on the Luxembourg Stock Exchange.

By Inti Landauro, Dow Jones Newswires; 57-1-610-70-44

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