UPDATE 2-Colombia begins sale of $1 bln of bonds abroad
BOGOTA, Sept 19 (Reuters) - Colombia issued $1.6 billion in 10-year bonds on international markets on Thursday a day after the Federal Reserve's decision to maintain its pace of bond buying lowered the interest rate paid on emerging market bonds.
Colombian Finance Minister Mauricio Cardenas said some of the proceeds of the sale, which had originally been planned at $1 billion, would be used to pre-finance funding needs for 2014.
The cash will not be brought into Colombia to prevent a strengthening of the peso, Cardenas told reporters.
The government decided to proceed with the sale late on Wednesday in light of the Federal Reserve's decision to delay slowing its $85 billion per month bond buying program which has kept borrowing costs lower in emerging markets, such as Colombia.
"We were weighing the moment, waiting for declarations and today we will find out how this sale turns out," Cardenas told Caracol Radio, adding the funds would be used to pay down Colombia's foreign debt as well as for payments owed for defense-related purchases.
According to IFR, a unit of Thomson Reuters, the bond issue is being handled by Deutsche Bank and HSBC and had a starting price of 142 basis points over comparable U.S. Treasuries.