Colombia's international dollar bonds rally after repurchase offer

Aug 28 (Reuters) - Colombia's international dollar bonds rose across the curve on Thursday, a day after a group of global banks announced an offer to repurchase Colombia's sovereign bonds maturing from 2027 through 2061.

The 2027 issue CO007401060= gained 3 cents to bid at 102.76 cents on the dollar, while the 2061 195325DX0= added 2.87 cents to bid at 59.625.

The banks, including BNP Paribas, Citigroup C.N, Goldman Sachs GS.N, JPMorgan JPM.N and others, launched the buyback in an offer document circulated on Wednesday.

Colombia's finance ministry said last month it was seeking around $10 billion through the operation, though the results themselves would depend on how much debt the current holders of the bonds would decide to sell to the banks.

Wednesday's offer document did not set a maximum amount, saying this would be decided between the parties.

The offer is set to run through next Wednesday, and on Thursday the banks expect to announce the value of the bonds they will have repurchased. The settlement date is scheduled for the following Monday.

Colombia's finance ministry is looking to reduce the cost of its debt amid a deterioration in the South American nation's public finances, through both foreign and domestic operations, including debt swaps and repurchases.

Analysts at Banco de Bogota noted that the government would likely have to issue new debt to pay the repurchased debt next year.

"It is important to highlight that, with the repurchase of bonds, Colombia is committing to pay the entire amount of that credit (to the banks) next year, most likely through the issuance of new bonds for the market," they said in a note.

Ratings agencies Moody's and S&P downgraded their credit ratings for Latin America's No. 4 economy after the government in June suspended its fiscal rule, a limit on the country's debt-to-GDP ratio, in order to raise the fiscal deficit to 7.1%.

It suspended the fiscal rule for three years.