Hesitant to enter an unfavorable market, Titularizadora Colombia is shooting for October at the earliest to issue Colombia's second ever MBS, said a source on the deal. "We're hoping things will stabilize over the next couple of months," the source said. Effectively Colombia's version of Fannie Mae, Titularizadora aims to place another Ps500 billion (US$190.6 million) before year-end, on top of the initial Ps478.9 billion (US$182.3 million) priced in early May.
Domestic markets are reeling from currency volatility via Brazil, compounded by fears of intensified rebel violence under the tougher approach of Colombia's new President Alvaro Uribe, who took office early this month. The benchmark 2012 fixed-rate treasury is yielding 16% from 14% in early May, while the currency has plunged 9% since July 1. In addition, the next issue of TIPs, as the bonds are known locally, is unlikely to price at such a steep premium to treasuries as the first placement, sources say. On a weighted basis, the first issue - split into five-year (Ps229.5 billion), 10-year (Ps198.6 billion), and 15-year (Ps50.8 billion) tranches - came at 250 basis points inside the government curve.