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July 19, 2011

Moody’s Investor Service and Fitch Ratings, two of the world’s top credit-ratings agencies, recognized Colombia’s positive economic performance, improving the country’s rating to the investment grade of BBB-minus. The new rating follows Standard & Poor’s similar upgrade of Colombia’s debt in March.

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

Moody’s and Fitch are both “big three” 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” debt-repayment record. The country’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’s reported that Colombia’s upgrade in foreign-currency bond-rating from a Ba1 to a Baa3 results from “Colombia’s proven ability to deal with internal and external shocks, as evidenced by the government’s recent economic and financial performance and the country’s long history of timely debt payments.”The precipitous decline in violence also proves the state’s ability to manage non-economic shocks over time.

Erich Arispe, sovereign credit analyst at Fitch, added that Colombia’s "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" and contributed to its good grade.

Both Moody’s and Fitch judge Colombia’s rating outlook to be “stable.”

"Moody’s and Standard & Poor’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,” 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.”

Colombia's five-year average growth is anticipated to reach 4.2 percent in 2011 (well above Fitch’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.