Buyback operations allow Treasuries to withdraw securities from the market before their maturity date against payment in cash. These operations are a useful tool that help sovereign debt managers mitigate refinancing risk, increase the liquidity of government securities and enhance price transparency.
This webinar illustrated three different uses of buybacks. Ms. Camila Erazo, Head of Public External Funding from the Ministry of Finance of Columbia, presented the Colombian experience; a large buyback operation conducted in October 2018, dealing with the accumulation of redemptions in this and the next few years. Mr. Tenzing Sharchok and Ms. Bozena Krupa Giza from the аIJʿª½± Treasury, illustrated the аIJʿª½± acting as an agent for a sovereign wanting to retire securities from the international capital market when these are getting close to maturity. They also presented operations routinely offered to dealers giving them the possibility of selling back relatively illiquid MTNs.
The presentations, moderated Mr. Antonio Velandia, Senior Financial Officer, Financial Advisory & Banking from the аIJʿª½± Treasury, provided a background for these operations, the rationale for the buybacks, a high-level process for preparation and execution, as well as the challenges presented by these operations. The webinar concluded with a Q&A to provide the participants the opportunity to discuss and share other experiences and lessons learned.