Colombia Turns To Swiss Francs To Restructure Crippling Debt

(MENAFN- Swissinfo) Colombia is seeking to borrow as much as $10 billion in Swiss francs to fund the repurchase of more expensive liabilities in a bid to rein in the nation's burgeoning debt service costs. This content was published on July 4, 2025 - 10:01 4 minutes Bloomberg

• Português pt Colômbia recorre ao franco suíço para reestruturar dívida Read more: Colômbia recorre ao franco suíço para reestruturar dívid

+Get the most important news from Switzerland in your inbox

The government is in talks with at least eight major international banks to secure financing to buy back bonds denominated in Colombian pesos and US dollars, public credit director Javier Cuellar said. The loans would have a low interest rate but increase the impact of exchange rate fluctuations.

+ World's strongest currency also super competitive

“I'm taking a big risk, possibly the biggest risk any public credit director has taken,” Cuellar said in an interview this week.“This operation is unprecedented.”

The radical new debt management strategy comes after the administration of President Gustavo Petro suspended the nation's fiscal rule for the next three years as it tries to avoid painful spending cuts. The announcement was swiftly followed by downgrades by both Moody's Ratings and S&P Global Ratings last month.

“There are significant rollover risks because the operations are short-term and involve significant interest rate and exchange rate risks,” said Andres Pardo, chief Latin America strategist at XP Investments.

More More A blessing and a curse: the strength of the Swiss franc

This content was published on May 23, 2023 In times of crisis, international investors often bet on the Swiss franc. How has this reputation come about?

Read more: A blessing and a curse: the strength of the Swiss fran

MENAFN04072025000210011054ID1109761475