Peru Pays Down Brady Debt

Peru followed through with plans to pay down $838m worth of Brady debt Friday. The sovereign eliminated its outstanding amounts FLIRBs, PDIs and Discount bonds, Jose Miguel Ugarte, head of public credit, tells LatinFinance. Peru used $685m worth of proceeds from peso-denominated sovereign issuances at the end of last year to pay down the notes at par. It also used $153m from the Treasury to pay the balance, says Ugarte. The process eliminates virtually all of Peru’s Brady debt. The country still has about $50m in Par bonds that are trading at 85, which it chose not to call. Having received news of the plans to pay down the debt earlier this year, markets didn’t react to the move Friday, says one Andean strategist. The strategist notes that in general, however, the move is a welcome development that is part of Peru’s overall positive story.