EM LATAM CREDIT: Colombia (COLOM; Baa2neg/BB+neg/BB+neg): Fin. Minister Resigns
“Diego Guevara resigns as Colombia's finance minister” – El Pais
Neutral for spreads
• Its now official after reportedly a "personal, friendly, and calm" conversation with President Petro yesterday. Local media reported that German Avila Plazas could be the replacement.
• El Pais interviewed Guevara last Sunday in which he talked about his proposals for budget cuts to offset declines in revenue which Petro rejected.
• He also discussed the need to make debt payments, lack of cash necessitating delays to energy suppliers for subsidy payments and the debt burden accumulated from the past.
• The rating agencies have given credit to Colombia for historically being fiscally responsible, but none of that seems forthcoming as Petro doubles down on his agenda so ratings downgrades seem likely soon.
• Rating downgrades may already be priced in by the market, but where does the USD3.6bn international financing proposed in the 2025 budget clear the market?
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GLOBAL POLITICAL RISK: Week Ahead 17-23 February
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MNI's Political Risk team has published its Week Ahead article looking at the major political risk events taking place over the next week. Includes information on the US & Russia holding initial talks on the Ukraine peace process, European leaders pushing for defence unity & higher spending at an emergency summit, and German voters going to the polls on 23 Feb.
