This content is from: Local Insights


The financing of large communication and infrastructure projects suggests the possibility of new forms of indebtedness, and the private placement of securities abroad is one option in project financing. In the past four years Colombian corporations and special purpose vehicles have privately placed securities abroad to finance their projects.

The private placement of securities abroad for corporations and special purpose vehicles requires special authorization in the case of public offerings of securities. Authorization for the placement of securities abroad can be granted by the Superintendency of Corporations (Superintendencia de Sociedades), unless (i) the issuer is a publicly-held company or (ii) the offering is addressed to more than (a) 100 specified investors or (b) undetermined investors, in which cases the authorization must be granted by the Securities Superintendency. Where the issuer is a financial institution, the Banking Superintendency is responsible for granting authorization.

The placement of bonds abroad is considered under Colombian law a form of foreign debt, and because the Central Bank is the Colombian authority in charge of the control and regulation of foreign debt, a prior deposit of 30% of the total amount of the whole bond placement must be made with the Central Bank through the financial institutions specially authorized for this purpose. In exchange for the deposit, the Central Bank issues a non-negotiable certificate which can be redeemed only after 18 months. A prior redemption of the certificate will be subject to a discount previously established under the Central Bank's schedules. Internal Resolution No. 21 of 1993 and its amendments contain all the legal aspects of the prior deposit, and the Bank's schedules for prior redemption of the certificate.

The Superintendency of Corporations: The Superintendency of Corporations has the power to grant an authorization to any Colombian Corporation supervised by it wishing to place bonds abroad privately. The purpose of prior authorization is, among other things, to assure future bondholders of the financial capacity of the issuer and to ensure that the operation is carried out in accordance with the law. Requests for authorization must be submitted directly to the Superintendent of Corporations and must certify that the bonds have been subjected to a prior analysis of their financial viability by an investment bank and that the issuer is able to meet its financial obligations.

Luis Nieto

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