Category: Peru

Intersur Concesiones, a Peruvian entity owned by three developers, plans to issue $323 million in 2028 zero coupon bonds and $234 million in 2018 zero coupon bonds to finance the development and concession of toll roads in Peru. The bonds will be issued from vehicles called Interoceanica IV, and are backed by the Peruvian government. Moody’s assigned a Ba3 rating.

Peru raised $113 million (360 million soles) from the tap of two of its local-currency bonds. The finance ministry said it sold 270 million soles in 2026s to yield 6.14% and 90 million soles in 2046s to yield 3.25%. Demand for the paper was 448 million soles and 274 million soles, respectively. The sovereign last tapped its 2026 issue, which carries a coupon of 8.20%, in March. Then it raised $62.8 million (200 million soles) of the domestic paper, selling above par to yield 6.30%. The inflation-indexed 2046 paper carries a 3.63% coupon. The government is authorized to sell up to 2.33 billion soles of local-currency paper this year.

Peru planned to reopen two of its sol-denominated issues on Monday, hoping to raise $75 million (240 million soles) from the sale of local-currency paper – 180 million soles in 2026s and 60 million soles in 2046s. The sovereign last tapped its 2026 issue, which carries a coupon of 8.20%, in March. Then it raised $62.8 million (200 million soles) of the domestic paper, selling above par to yield 6.30%. The inflation-indexed 2046 paper carries a 3.63% coupon. The government is authorized to sell up to 2.33 billion soles of local-currency paper this year.

Peru’s national statistics bureau INEI has released inflation figures for March showing that prices continue to pick up speed, rising by 0.35% last month against a rise of 0.26% in February. March’s price rise is the fastest in the past 11 months. The Central Bank is targeting inflation this year of between 1.5% and 3.5%. Cumulative inflation for the first quarter of the year was 0.62%.

Ratings agency Standard & Poor’s has raised its long-term counterparty credit rating on Banco de Credito del Peru (BCP) to BBB- from BB+, one notch above the sovereign foreign currency rating, and its short-term rating to A-3 from B. The outlook is stable. S&P said the ratings action reflected the improving economic and industry risks for Peru’s banking sector and specifically the Bank’s likely survival of any economic chaos of a “sovereign stress scenario” because of BCP’s “superior liquidity; traditional stability of its deposit base in past crises; benefits from a strong retail franchise; strong business and financial diversification; and very solid financial performance”.

Peru’s finance ministry is set to embark on a major reform of the country’s capital markets, and will begin by implementing measures to create a market for mortgages and mortgage-backed securities, the country’s vice minister of economy Juan Miguel Cayo, told LatinFinance. Cayo added the ministry hopes to complete its proposal for market reforms in the second half of this year. The document will suggest changes in taxation, securities law and regulation.

Peru plans to pay down its remaining outstanding $900 million in Brady debt and $1.8 billion in Paris Club debt by the end of the year, vice minister of economy Juan Miguel Cayo told LatinFinance. “We aim to pay down all the Bradies and non-concessional parts of our Paris Club debt this year,” Cayo said. Local issuance of bonds, which will help finance Peru’s liability management exercises, will likely total $2.5 billion this year, added the vice minister. That is more than three times the amount originally outlined in the country’s financing plan for 2007.

Peruvian food products company Alicorp sold $20 million-worth of local-currency bonds on Friday, receiving bids for more than twice the amount on offer. The 10-year bonds, which mature March 16, 2017, were sold to yield 6.16%. Citi was the sole lead.

Peru’s economy expanded by 9.22% in January, the strongest year-on-year growth for this month in the past 11 years, according to national statistics agency INEI. Retail and manufacturing led growth, expanding 13.8% and 11.5% respectively. Construction was up by 11%. However, the mining and hydrocarbons sector contracted by 1%, largely due to a drop in output of gold as well as a lesser fall-off in copper and tin production.