Summary: Hacienda, local/commercial banks, and pension funds were the largest buyers in July, amounting to a total of over COP21trn. Meanwhile, foreigners and public fiduciaries/trust funds were the largest and only sellers, accounting for 99% of gross outflows. In addition, the Finance Ministry bought just over COP10.5trn in COLTES, accumulating total active bond buying of COP14.3trn in the secondary market for its strategic reserve portfolio through June and July. Net issuance of COLTES totaled c.COP13.2trn in July vs. COP2.8trn in June.
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Market View: The local bond downgrade from IG to non-IG recently drove some international investors’ outflows. Hacienda has halted outright purchases and has started to extend duration in local issuance again. The FinMin is using the recent curve flattening as an opportunity to issue at lower rates. Given the recent execution of the Hacienda’s repurchases, the belly offers improved relative value in tenors such as 2031s, which offer a strong yield and carry-rolldown in this segment of the curve. Meanwhile, some investors have shifted to trading credit risk in long-end rates and have had some preference for lower cash price bonds. However, this has improved relative value for high coupon bonds in the long end of the curve. For instance, 2040s are flagging relatively cheap amid a recent debt management transaction. In addition, 2s10s in COLTES remain steep outright and against the US. This is being driven by a steep breakeven inflation curve in Colombia while real rates remain elevated across all tenors, adding little to relative term spreads.
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The Ministry of Finance/Haciendawas the main buyer of COLTES in June, increasing its allocation by a substantial COP10.5trn. Virtually all purchases were concentrated in the Nominal TES market in a shift that drove overall COLTES holdings to COP14.8trn up from COP4.3trn or from 0.7% to 2.2% of the COLTES market, confirming active bond buying in the secondary market for the strategic reserve portfolio through July. Accumulated purchases between May and July amounted to COP14.3trn.
- Commercial banks were the second-largest buyers of COLTES in July, adding c.COP8.9trn, which reflected an increase in allocation of 8.6% vs. the 2.0% growth rate of the total COLTES market that led to a notable increase in holdings to 17.0% from 16.0% in June 2025. Purchases were concentrated in nominal bonds (TES B) amounting to COP8.0trn, with some net purchases in inflation linkers (TES UVR) of COP 0.9trn.
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Pension funds purchased close to COP2.9trn of COLTES in July. COP2.5trn was nominal (TES B) purchases. The overall TES pension holdings growth was just 1.4% vs. the 2.0% market growth, which resulted in a slight decline of holdings to 31.1% from 31.3% in June.
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International investors’ COLTES allocation dropped sharply amid the recent credit rating downgrade below investment grade in June. Holdings fell by c.COP6.4bn, driving market ownership from 17.1% in June to 15.8% in July, the lowest foreigner allocation since June 2015. Hacienda purchases overshadowed this outflow and helped bonds rally in July despite this foreigner outflow.
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Insurance Companies were the third largest buyers of COLTES but concentrated in UVR linkers (+COP1.84trn), which shifted the allocation for Insurance companies 2.4% higher MoM. As a result, Insurance companies’ holdings in grew slightly to 12.1% in June from 11.9% in May.
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Public trust funds/fiduciaries, were the largest sellers of COLTES in July, dropping a total of COP11.4trn of COLTES. The holdings of public trust funds fell 2.1pp from 7.9% to 6.0%.
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Insurance companies were the third-largest buyers of COLTES but concentrated in UVR linkers (+COP1.84trn), which shifted the allocation for insurance companies 2.4% higher MoM. As a result, insurance companies’ holdings grew slightly to 12.1% in June from 11.9% in May.