Phillipi Prietocarrizosa Ferrero y Uría

Bancolombia makes debt tap and tender offer

Two Sullivan & Cromwell LLP offices and Brigard Urrutia in Bogotá have helped Bancolombia carry out a US$800 million notes issuance and complete a concurrent tender offer.

Three Cleary Gottlieb Steen & Hamilton LLP offices and Philippi Prietocarrizosa Ferrero DU & Uría (Colombia) advised the underwriters and dealer managers.

The issuance closed on 24 June.

The notes are set to mature in 2034 and have a coupon of 8.63%.

Bancolombia will use the proceeds of the issuance to repurchase its 6.09% notes due in 2027 and the remaining proceeds will be used for general corporate purposes.

At the same time, the Colombian bank also made a tender offer to repurchase its 3% notes due in 2025 and up to US$400 million of its 6.9% notes which will mature in 2027. The offer expires today.

In April, Bancolombia formed part of a consortium of banks that funded construction companies Ortiz and KMA in its development of the Troncales de Magdalena 5G dual toll road. This came shortly after the bank’s Panamanian branch gave a loan to Colombian oil producer SierraCol Energy for the acquisition of several assets.

Latin American banks regularly turn to the local and international capital markets to raise funds. In June, Peru’s Interbank registered a new bond programme worth up to US$300 million. This came shortly after Ecuador’s Banco del Pacífico and Banco Bolivariano raised funds in offerings of dollar-denominated diversified payment rights.

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