[ad_1]
The Colombian Stock Exchange (BVC) will play the flute. Literally. At 2:00 in the afternoon, when a new customer has finished placing bonds of public debt for $ 650 billion, brokers will not hear the vibrations of the traditional closing bell, but the whistle through a flute of a thousand.
What happens is that it is not just any client: is the city of Barranquilla, which after 12 years of cleaning up and consolidating its public finances, a product, in addition, of the confidence that it was building during that period, reaches the Stock Market.
It is the first city in Colombia, after Bogotá, to go to the stock market.
What Barranquilla is looking for is to get fresh resources to improve your debt profile, with more terms and less interest, and thus free up resources that allow it to finance its development projects.
In the end, that’s what it is: having more money to invest. But with a fundamental difference: the conditions of that loan will no longer be imposed by the banks, but by market conditions.
Not any issue normally reaches the Stock Exchanger. And much less if it is a territorial entity. To be accepted, you need to show financial strength and support as an institution. In a word: trust.
That was what Barranquilla had the least 12 years ago.
The city had a budget of barely $ 600 billion annually, which they were usually seized or in legal action. No one in the city believed in public service. Inefficiency and corruption raged. Barranquilla was bankrupt.
Background
With the first administration of Alejandro Char, the District began a transformation process that started with financial consolidation and it settled historical debts with traditionally marginalized social sectors.
In the Elsa Noguera administration, the city came out of Law 550, known as the Bankruptcy Law, and was able to bet on large processes such as the channeling of streams and the recovery of parks.
In Char’s second term, Barranquilla was another: with private investments for more than USD6 billion that ensured the confidence of investors and businessmen, and a budget that approached $ 4 billion, international magazines considered it as the new emerging economy of Latin America.
Emission
Everything was given to take the next step. And the mayor Jaime Pumarejo gave it, with the endorsement of the Ministry of Finance and Public Credit, the District Council for Economic and Fiscal Policy (CODFIS) and the Financial Superintendence of Colombia (SFC).
The AAA rating given to In 2019 the evaluator Fitch Ratings strengthened the operation.
“This bond issuance is a vote of confidence with the city, the purpose of which is to reduce debt spending and thus invest more in people and economic development, continue to carry out social investment projects, promote job creation and improving the quality of life of Barranquilleros”Said Pumarejo.
For his part, the District Secretary of Finance, Gustavo Rocha Parra, highlighted “the strength of a city that has worked very hard in recent years to demonstrate constancy, transparency and efficiency in its processes, which results in adequate fiscal management to obtain the support of specialized entities, the risk rating agencies and the investing public ”.
The auction
The operation, in charge of the Itaú Colombia group, It starts at 8 in the morning, under the best effort Dutch auction. Throughout the day, investors will be making their proposals for the series of bonds of 5, 10 and 20 years, but without knowing the maximum interest rates determined by the District. The best options will be chosen when all have been submitted.
This must happen no later than 2 in the afternoon. Then the country will know how successful it was, that is, what amounts and under what conditions the bonds were purchased.
At that time the flute of the millet will be played by Joaquín Pérez Arzuza, tutor of the district houses of culture, winner of more than 20 national festivals and three gold congos as the best interpreter of the millet flute.
It will be the first time that a different sound has replaced the stock bell. It is also historical that the city is so busy in the national stock market.
[ad_2]
