Fitch rates Colombia bond BB

Fitch Ratings said it assigned an expected rating of BB to the Republic of Colombia's pending $250 million equivalent peso-denominated global bond payable in U.S. dollars and maturing in March 2010.

The rating is equal to Colombia's long-term foreign currency sovereign rating. The outlook is stable.

Following four years of large deficits and slow economic growth, which drove public debt up by 30% of GDP, public finances appear to be stabilizing as the economy gathers momentum, higher taxes boost the primary surplus and recent peso appreciation keeps a lid on government debt, half of which is in foreign currency, relative to GDP, Fitch said.

As with many other countries in the region, competitiveness is benefiting from improved terms of trade, and faster global growth is underpinning stronger external demand. In Colombia's case, local confidence has also risen on the perception of improvements in domestic security, a grave concern in this country struggling with a decades-old guerrilla movement and very high crime rates.

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