This is the second bullish day after it was known that Colombia lost investment grade.
During the session this Friday, the dollar in Colombia rises $ 13 and is trading near $ 3,730. This is the second bullish day after it was known that Colombia lost investment grade.
It may also interest you: Colombia would take at least two years to recover investment grade
This Wednesday it was learned that Standard & Poor’s (S&P) lowered Colombia’s risk rating for long-term debt in foreign currency, from BBB- with a negative outlook to BB + with a stable outlook. Which means that Colombian debt is now in the terrain of “junk bonds” (a financial term that refers to debt below investment grade).
However, for many analysts Standard & Poor’s only made official what the entire market already knew: in fact, a Bloomberg report revealed that Colombian debt in dollars already behaved like junk bonds, similar to that of Guatemala or Uzbekistan nations that are three ratings below investment grade. That is, beyond the position of the rating agencies, for investors Colombia had already lost this status.
Despite the dollar rise in recent days, the market reaction to the investment grade loss has been subdued. Which confirms that the news was already discounted. In fact, the exchange rate rose more when the withdrawal of the tax reform was known on May 2 (the following day the dollar rose close to $ 60).
It may also interest you: Five companies and two Colombian entities also lose their investment grade in S&P
However, the loss of investment grade is causing blows. This Thursday it was learned that five companies and two Colombian entities also lose their investment grade in S&P.
These are Ecopetrol, Grupo Sura, Isagen, Ocensa and Davivienda, as well as that of Financiera de Desarrollo Nacional (FND) and Findeter.
In all cases, the long-term rating went from BBB- to BB + with a stable outlook, that is, like Colombia, these organizations lose their investment grade.
