Political Risk Latin America Blog @PolRiskLatam

Colombia’s latest triumph: investment-grade rating

Posted in News and Articles, Political Risk by politicalrisklatam on March 17, 2011

by Naomi Mapstone for Financial Times – Beyond Brics, March 16th, 2011.

It has weathered the mother of all economic shocks, turned the tide in Latin America’s oldest insurgency and now, Colombia has regained a coveted investment-grade rating.

Standard & Poor’s decision to rate the country’s long-term and short-term foreign-currency sovereign credit at BBB- and A3 respectively puts it in good company in the region.

Brazil, Mexico, Chile and Peru are all investment-grade economies, and the last two are Colombia’s partners in the forthcoming bourse integration, Mila, that will create Latin America’s second biggest market by market capitalisation after Brazil.

“Colombia is now an investment-grade country. That sends a signal to the world and also makes it very clear to anyone who has restrictions on their investment choices,” Joydeep Mukherji, S&P analyst, told the FT.

Colombia lost its investment rating in September 1999 amid a banking crisis and escalating violence in the war with the Revolutionary Armed Forces of Colombia.

S&P raised its rating to BB+ back in 2007 and gave it a tantalising positive outlook, but global downturn from the financial crisis delayed the decision. (continue reading… )

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