821.51/4–1147: Telegram

The Ambassador in Colombia (Wiley) to the Secretary of State


207. With great tact and skill Dr. Rogers has concluded his conversations with Dr. Esteban Jaramillo and Dr. Carlos Lleras Restrepo19 for settlement of bonds of six departments and two municipalities which have been in default for approximately 16 years. Agreement in principle has been reached which includes reduction of interest rate to 3 percent per annum and refunding of interest arrears on basis of 20 percent of capital value to be added to face value of bonds outstanding. A new bond issue will be made with each department and municipality separately responsible for its part but with national government guarantee of whole. Aforesaid agreement is subject to approval by Departmental assemblies and municipal councils concerned, by Colombian Congress and of course, by Bondholders Council in US. Both Jaramillo and Lleras seem confident that terms of proposed settlement are such that no serious obstacle is to be foreseen in obtaining Colombian approval. President Ospina has expressed himself as delighted. President Ospina has ordered that everything be done to prevent any further Colombian transactions in defaulted bonds.

  1. Messrs. Jaramillo and Lleras Restrepo represented the interests of the two towns and the departments of Colombia.