BOGOTA: Colombia took in 6.4 trillion pesos ($3.47 billion) of short-term peso bonds in return for debt with longer maturities, the finance ministry said on Tuesday, cashing in on its new investment-grade status.

The debt swap was Colombia's first this year and comes amid strong economic growth, better-than-expected tax revenues and a slim fiscal deficit.

The government took in local debt maturing in 2012,2013 and 2014 worth 6.40 trillion pesos in exchange for bonds maturing in 2015, 2018 and 2026 of 6.38 trillions pesos, according to preliminary finance ministry figures.

The freshly issued 2026 bond will become a new benchmark, part of an effort to make Colombia's local debt market more attractive to institutional investors.

Experts and market makers polled by Reuters last week on average predicted about $1.7 billion of debt would be exchanged but the government offered better-than-expected terms.

Colombia has become a safer country over the last decade thanks in part to a US-backed military push against drug-running leftist guerrillas and other outlawed groups.

The improved security has helped Colombia attract billions of dollars in foreign investment, and was cited as one reason the three major ratings agencies anointed the South American nation with investment-grade status earlier this year.

Copyright Reuters, 2011