Funds managed by Pacific Investment Management Co. (Pimco) invested $2 billion in Colombia's local public debt last month, specifically before the first round of presidential elections. This investment continues a trend of significant purchases by Pimco in Colombian debt.
Earlier in February, Pimco funds acquired a net 5.4 trillion pesos ($1.5 billion) of Colombian local debt, solidifying their status as the largest foreign holder of the nation's peso bonds. This occurred ahead of presidential elections that were anticipated to bring about a substantial governmental shift.
Even earlier, in December, at least 60 Pimco-managed funds participated in a private placement with Colombia, acquiring over 19 trillion pesos ($5.3 billion) in local debt. This move was aimed at assisting the government in financing its escalating deficit. The total foreign purchases of Colombia's local peso bonds (TES) in December, led by Pimco, amounted to a net 26.6 trillion pesos, with other major buyers including California Public Employees' Retirement System and sovereign wealth funds from Saudi Arabia, Singapore, and Norway. International investors held approximately 164 trillion pesos of Colombian local bonds by the end of last year.
Colombia faced increasing fiscal pressure due to high public spending and lower-than-expected revenues, with the fiscal deficit expanding to nearly 7% of GDP last year. The nation's public credit director, Javier Cuéllar, implemented a debt management strategy that included borrowing about $9 billion in Swiss francs through swaps, selling euro-denominated bonds, and repurchasing dollar- and peso-denominated notes. The Comptroller General's Office warned that debt amortization obligations would exceed $74 billion between 2026 and 2030, with a particularly severe peak of $90 billion in 2029.
