Mortgage securitizer Titulariza- dora Colombiana floated its third issue July 19, selling through Dutch auction Ps135 billion (US$48 million), for a total senior issue of Ps449 billion (US$160 million). As before, tax exemption on the bonds worked like a magnet on investors, helping take the average weighted yield on the three-tranche deal to an inflation-indexed 4.76%.

But not everyone cheered. The tight yields froze out more than a few bidding investors, and tongues wagged for days about a suspiciously large purchase of roughly 85% by Davivalores, an arm of one of three originating banks, Banco Davivienda. "The placement was very attractive... but not everyone was happy and some wondered why so much went to Davivalores," said a trader at another one of the 12 placement agents.

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