THE DESIGN OF ISSUANCE

CALENDARS AND THE

IMPACT ON SECONDARY

MARKETS

FOR GOVERNMENT

SECURITIES

World Bank Government Bond

Market Conference 2017

Ministry of Finance

Colombia

CNG debt market portfolio

64.35

130.92

37%

44%

0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

120

140

mm

USD

External Debt

Internal Debt

Total Debt

Total Debt/GDP (right-axis)

CNG financing

sources

Local

External Global TES

Multilaterals

TES

Data includes in local currency Long-Term, Short-Term, Monetary, TES Bonds,

and Global TES Bonds. In foreign currency: Global Bonds

Source: Deputy Directorate of Risk, Data as of December 31th 2016.

Exchange rate as of March 31st ($2,880,24)

Debt Situation Colombia

Deputy Directorate of Public

Credit and National Treasury

(front-office)

Source: Deputy Directorate of Internal Debt, Data as of March 31th 2017.

Exchange rate as of March 31th ($2.880,24)

Local TES bond portfolio composition

39.5 45.6

50.3 51.4 56.3

62.5 67.5

80.0

0

10

20

30

40

50

60

70

80

90

mm

USD

TES UVR

TES COP

Total TES69%

31%

79%

21%

79% 79% 77% 75% 77% 73% 70% 69%

21% 21% 23% 25% 23% 27% 30% 31%

0%

20%

40%

60%

80%

100%

TES COP

Participation

(right-axis)

TES UVR

Participation

(right-axis)

0

20

40

60

80

100

120

140

160

mm

USD

16 +

10 to 16

4 to 9

0 to 3

Time to Maturity

Fixed rate vs. Inflation indexed

7.5% 8.1%

10.0%

8.2% 6.8%

9.7%

6.2%

11.3%

3.9%

9.4%

0.5%

5.8% 7.2%

1.6%

3.7%

2.2%

0%

2%

4%

6%

8%

10%

12%

0

2

4

6

8

10

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2030 2032 2033 2035

mm

US

D

TES UVR

TES COP

Annual maturities (%)

*Includes Monetary TES Bonds and Short-Term Bonds

Source: Deputy Directorate of Internal Debt, Data as of March 31th 2017.

Exchange rate as of March 31th ($2.880,24)

Local TES bond portfolio composition

4.0

4.5

5.0

5.5

6.0

6.5

7.0

8.0%8.2%8.4%8.6%8.8%9.0%9.2%9.4%9.6%

Average Coupon

ATM (right axis)

Average Coupon vs. Average Time to Maturity

Maturity Profile

Medium-Term Debt Management Strategy

2015 2020

LX: 65%

FX: 35%

Cost-at-risk analysis

Fiscal projections

Stochastic model for financial variables

Target FX/LX portfolio composition:

Medium-Term Debt Management Strategy

LX Portfolio

Target annual maturities /rollover risk:

Time to maturity

15%

13%

14%

5 - 10 0 - 5 10 +

FX Portfolio

Time to maturity

8%

9% 10%

5 - 10 0 - 5 10 +

Total Portfolio

Time to maturity

11%

12% 13%

5 - 10 0 - 5 10 +

Historical analysis

Annual M

atu

rity

/

To

tal Lo

ca

l D

ebt

Annual M

atu

rity

/

To

tal Lo

ca

l D

ebt

Annual M

atu

rity

/

To

tal Lo

ca

l D

ebt

The preparation of the issuance calendar

ABP Issuance

Calendar Guidelines:

Issuance Strategy

Fiscal Rule

MTDS

Transparency

Sound Practices Mandatory Quotation

Bonds

• At the beginning of every quarter,

the amount per auction (not per

bond) is announced to the Primary

Dealers

• At the beginning of the year, the

On-The-Run Bonds are announced

to the Primary Dealers

Both, published on the official web side:

www.minhacienda.gov.co

Investor Relations Office:

www.irc.gov.co

Guidelines

On-the-run bonds:

• TES Issuance Strategy

• Maturity-month uniformity

• Auction yield: market proximity (avoid distortions)

Auction’s size:

• Financing need’s target

• Non-competitive auctions

• Primary market presence during the year

TES Issuance Strategy (TIS)

CNG financing

in

local market

Auctions

Public

Entities

TIS

TES

COP

Time to maturity

15 years (opening)

10 years (1ª reopening)

5 years (2ª reopening)

TES

UVR

20 years (opening)

10 years (1ª reopening)

5 years (2ª reopening)

Liability

Management

Operations

Smoothing

Treasury cash

flow TCO

TES Issuance Strategy (TIS)

Plazo 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

5 20192019

2020

2020

20222022 2022 2025 2025 2026 2026 2028 2028 2030 2030 2032 2032

10 20242024

20262026 2026 2028 2028 2030 2030 2032 2032 2034 2034 2036 2036 2038

15 2028 2030 2030 2032 2032 2034 2034 2036 2036 2038 2038 2040 2040 2042 2042

Plazo 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

5 2019 2019 2021 2021 2023 2023 2025 2025 2027 2027 2029 2029 2031 2031 2033

10 2021 2025 2025 2027 2027 2029 2029 2031 2031 2033 2033 2035 2035 2037 2037

20 2033 20332033

20352035 2037 2037 2039 2039 2041 2041 2043 2043 2045 2045 2047

CO

PU

VR

0%

5%

10%

15%

1 1 1 2 2 2 3 3 5 5 7 8 12

Parti

cip

ati

on

Years to maturity

2007

0%

5%

10%

15%

20%

1 2 2 3 4 6 8 10 12 14

Parti

cip

ati

on

Years to maturity

2016

2008 2009 2010 2012 2014 2015 2020

2018 2016 2019 2020 2022 2024 2026 2028 2030

Before TIS

TCO

$2,6 bn

Issuance Target

For every TCO in the

primary market

Maturity

Cycles

March

June

September

December

Unique time to

maturity

364 days

Short-term Bonds Program (TCO)

Objective:

Smooth Treasury Cash Flow

Organization of auctions

• COP - local currency: every

Wednesday in the 2nd and 4th

monetary week .

• UVR – inflation indexed: every

Wednesday in the 1st and 3rd

monetary week .

• TCO – Short-Term Bonds:

every Tuesday

1a

2a

3a

4a

*Monetary week: at least 3 business days

between Monday and Friday.

Auctions Calendar

Dom Lun Mar Mier Jue Vie Sab

UVR

COP TCO

COP

UVR

TCO

TCO

TCO

TCO

Challenges

Liability Management Operations:

• Improve the maturity profile

• Develop a systematic window

To keep constant the Foreign investors participation

Sell buy back market improvements:

• Ensure the liquidity in the secondary market

Derivatives market development