Colombia’s Credit Rating Again Raised to Investment-Grade

Colombia&rsquo s successful economic climate has again been upgraded by international credit-rating agencies, this time receiving investment-grade rating from Moody&rsquo s Investor Service and Fitch Ratings. In March, Standard &amp Poor&rsquo s boosted Colombia&rsquo s debt status, prompting the largest surge in the stock market in two years as investors signaled increased confidence in the emerging economy.

Moody&rsquo s and Fitch are both " big three&rdquo credit-rating agencies, and a nod of approval from them encourages investor confidence. According to Fitch, Colombia earned the BBB-minus grade in part because of its " impeccable&rdquo debt-repayment record. The country&rsquo s prudent economic policies and increased resiliency to internal and external shock have caught the attention of a broader range of investors, who increasingly view the risk of default as minimal.   

Similarly, Moody&rsquo s reported that Colombia&rsquo s upgrade in foreign-currency bond-rating from a Ba1 to a Baa3 results from " Colombia&rsquo s proven ability to deal with internal and external shocks, as evidenced by the government&rsquo s recent economic and financial performance and the country&rsquo s long history of timely debt payments.&rdquo The precipitous decline in violence also proves the state&rsquo s ability to manage non-economic shocks over time.

Erich Arispe, sovereign credit analyst at Fitch, added that Colombia&rsquo s &quot increased macroeconomic policy credibility, flexible exchange rate regime, strengthened external liquidity position and moderate external debt have steadily improved the economy's capacity to absorb external shocks&quot and contributed to its good grade.

Both Moody&rsquo s and Fitch judge Colombia&rsquo s rating outlook to be " stable.&rdquo

&quot Moody&rsquo s and Standard &amp Poor&rsquo s investment grade for Colombia reflects the growing confidence in our national economy and is a signal to other foreign companies that our country presents a unique opportunity to grow,&rdquo said the President of PROCOLOMBIA, Maria Claudia Lacouture. " Our doors are open and our experts are available to all new investors who wish to relocate or expand in Colombian territory.&rdquo

Colombia's five-year average growth is anticipated to reach 4.2 percent in 2011 (well above Fitch&rsquo s 'BBB' median of 3.1 percent) and its macroeconomic environment is expected to remain stable, with inflation just over 3 percent in 2011 and 2012.