By Nelson Bocanegra and Carlos Vargas
BOGOTA, Dec 16 (Reuters) – Colombia will carry out many debt management operations in local and international markets next year, before the end of the current government’s term in August, in a bid to continue easing fiscal pressures, the head of public credit at the finance ministry said on Monday.
Colombia saved more than 21 trillion pesos ($5.5 billion) in debt service payments this year through liability management operations like swaps and buy-backs, public credit director Javier Cuellar told Reuters in an interview, projecting savings for 2026 will also be “a big number.”
“There could be new markets (for debt management operations), there could be some reorientation in terms of currency portfolio and funding sources,” Cuellar said at his office in downtown Bogota.
In its most recent operation in November, the country issued 2 billion euros in global bonds and repurchased $4 billion in securities.
Latin America’s fourth-largest economy will end this year with a fiscal deficit below the latest target of 7.1% of gross domestic product, he said, adding that next year the figure could come in below the 6.2% target set in the ministry’s fiscal framework.
“I would like to show a deficit below 6% of GDP for 2026 in the financial plan,” Cuellar said.
The targets will be updated between late December and early January. The ministry posted on X later on Tuesday afternoon that the 2025 fiscal deficit would be 6.2% of GDP, thanks to the debt management operations.
As part of its financing strategy, the government could explore new international markets such as Asia, Cuellar added.
The ministry is also considering direct placements of local TES bonds with international investors like hedge funds to reduce auction volumes and sales to state entities, he said.
“There was a divestment in Colombia (by foreign investors) and what I want is to revive investor appetite,” he said.
TES bonds are the second-largest source of domestic financing for public spending, after tax revenue.
Cuellar said the government expects to issue about $4.6 billion in global bonds next year to pay off a Total Return Swap operation carried out this year, through which the government obtained a one-year loan in Swiss francs worth around $9.3 billion.
He stressed the planned bond issuance will not represent net new debt and said dollar-denominated issuance for fresh financing needs “will be very low.”
The government of leftist President Gustavo Petro suspended the fiscal rule — a legal framework designed to prevent excessive debt and deficits — for three years to raise the 2025 deficit target, prompting Moody’s and S&P to downgrade the country’s sovereign credit rating.
(Reporting by Nelson Bocanegra and Carlos Vargas, editing by Julia Symmes Cobb and Alistair Bell)
