Peru Meets Investors, Plans Second Tour

Peru is meeting investors on a non-deal roadshow in the US and Europe that precedes a Middle East and Asia tour scheduled to take place in January, a government source tells LatinFinance. The first round of meetings started last Wednesday and wrap up this Thursday. Besides finance minister Luis Valdivieso and central bank president Julio Velarde, investors in New York, Boston and London were also set to meet executives from BCP, Buenaventura and Grana y Montero. Bankers not running the meetings expect it to lead to an early 2009 sovereign bond issue attempt. JPMorgan and Goldman Sachs are behind the tour, and $600m is the targeted new cash raising, say bankers not involved. “This is a non-deal roadshow, we are not discussing any specific transaction,” says the government source. In October, Peru was contemplating a 30-year cross-border bond issue of $400m-$600m, the sovereign’s first international foray since a $1.2bn offering of 6.55% 2037 bonds in March 2007 via Deutsche and Citi. DCM specialists say it will be lucky to get anywhere near 30 years in this market for size. Investors are waiting for stability before buying and their extreme caution would have significant impact on tenor and spread. Peru has yet to name a new public credit executive director, following the late November resignation of Pablo Secada. The next most senior official in the department is Betty Sotelo Bazan, general director of the national department of public indebtedness. Meanwhile, the IMF late last week put out a bullish report on Peru following a visit to Lima. “The Peruvian economy is expected to be among the fastest growing economies in the world in 2009, with real GDP growth projected at 6%,” says the Fund. “With global price disinflation already underway, inflation should decelerate below 3% by end-2009,” it adds.