Petro Government accelerated debt issuance again in February to alleviate cash crisis at the start of the year

TL;DR

The Colombian government accelerated debt issuance in February, raising COP 7 trillion in TES through operations with public entities.
This issuance represents 87.5% of the initially set 2026 target, indicating immediate liquidity pressures.
The strategy highlights the significant dependence on the local capital market for public spending.
Increased TES supply, particularly the 2035 fixed-rate TES, has led to price depreciation and higher investor yields.
The government's reliance on peso emissions is expected to continue until dollar reserves can be monetized.
Potential relief in March is anticipated from profit transfers from Banco de la República and Ecopetrol.
Recent TES yield increases are also attributed to longer-term fiscal concerns, credit rating downgrades, and expectations of less expansionary monetary policy in 2026.
Despite challenges, institutional and foreign investors have maintained significant demand for TES.
The authorized debt limit for the year is COP 152.2 trillion, the second highest in a decade, with a substantial portion for refinancing maturing debt.
Analyst forecasts indicate rising TES rates, with expectations for rates above 13% for benchmarks like the TES 2032.
Public spending execution in January 2026 exceeded initial targets, increasing financing needs.

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