By Nelson Bocanegra
BOGOTA, Oct 5 (Reuters) – Colombia plans to substitute some of its planned 2020 financing in dollars for a local debt emission of about 5 trillion pesos ($1.28 bln), three market sources with knowledge of the plan told Reuters on Monday.
The ministry will extend auctions of local so-called TES bonds until November in order to raise the projected funds.
TES paper is the country’s second top source of financing after tax collection.
The Finance Ministry plans to move ahead with pre-financing needs for 2021 and is considering an internal debt swap on the local market, the sources said.
The ministry did not have an immediate response to a request for comment.
In early September, director of public credit Cesar Arias told Reuters Colombia would carry out public debt swaps with multilateral banks to reduce its exchange rate exposure amid higher debt due to coronavirus and evaluate opportunities to extend expiries on local bonds.
Colombia has been obliged to look for billions of dollars in funding by issuing bonds and obtaining credit with organizations like the Inter-American Development Bank to deal with economic upheaval from the coronavirus pandemic. The efforts have increased its exposure to international exchange rates.
The International Monetary Fund increased the country’s flexible credit line late last month to $17.3 billion to help it weather the crisis. The government may release about $5.3 billion.
The credit line, valid until April 2022, was originally for $10.8 billion.
($1 = 3,881.80 Colombian pesos)
(Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb Editing by Leslie Adler and David Gregorio)
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