DEBT ISSUANCE CONTINUE TO GROWTH

DEBT ISSUANCE CONTINUE TO GROWTH

The Colombian market and the Colombian economy have been growing in a measured way, but with a very good outlook.

These things are main factors for the investors to see Colombia with good eyes and start considering the country as an investment possibility.

With the expectative generated by the strength of the financial sector, the good management of the real sector companies and the good qualification of the sovereign debt of the country, in the first semester of the year, the debt issuance grew 36% in comparison with the same period of 2011.

This growth was lead by the financial sector with the bond placement of companies like Bancolombia, Colpatria (now owned by Scotiabank), Finandina, Davivienda, Banco de Occidente (part of the Aval Group owned by Luis Carlos Sarmiento Angulo) and Bancoldex (which is a second-tier bank, owned by the national government). This last one was the bank which has more success on its bond placement due to the requirement that surpassed the expectations by 8,1 times the value offered.

The companies of the real sector also made their bond issuances with great results. Some companies that took the risk to go into the international financial system to place debt were Cementos Argos, Colombina and TGI S.A.

The Colombian companies had read the international markets in a right way, and for that reason they have been issuing fixed income assets as bonds with a lower rate than previous years to re finance their debts or to finance expansion plans with cheap money.

This leaves the Colombian companies in a fertile soil to keep issuing bonds and placing them in the international markets, but the over exposure to middle and long term debt could be dangerous if the Euro Crisis hits stronger than expected the domestic economy.