COLOMBIA: Moody’s Changes Colombia’s Rating Outlook to Negative; Baa2 Ratings Affirmed

Monday February 26 2018

On 22^nd February 2018, Moody’s Investors Service changed the outlook on the Government of Colombia’s ratings to negative from stable. Concurrently, Moody’s affirmed Colombia’s issuer and senior unsecured ratings at Baa2, its senior unsecured shelf ratings at (P)Baa2, and its short term issuer rating at P-2.

The change in the outlook on Colombia’s ratings was driven by the following factors:

(1) Expectation of a slower pace of fiscal consolidation and weakening fiscal metrics;

(2) The risk that the new government, post presidential elections, will not have an effective mandate to pass additional fiscal measures to preserve Colombia’s fiscal strength.

Moody’s decision to affirm the Baa2 ratings reflects the strength of Colombia’s credit profile, and relatively low external vulnerability. On several rating factors, including growth, economic size, and institutional factors, Colombia’s credit metrics remain in line with Baa2-rated peers.

The country ceilings remain unchanged. The long-term foreign currency bond ceiling remains at A3, while the short-term foreign currency bond ceiling remains unchanged at P-2. The long-term foreign currency deposit ceiling is unchanged at Baa2, and the short-term foreign currency deposit ceiling is unchanged at P-2. The long-term local currency bond and deposit ceilings remain unchanged at A2.

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