Peru Inches Closer to Mandate

Peru may mandate banks this week for an international bond transaction, according to officials at Peru’s Ministry of Finance. The country is analyzing a variety of funding options, but has expressed a strong interest in sol-denominated debt. The officials declined to comment about timing, tenor and size, but said the sovereign is closely monitoring the market for windows of opportunity. In July, Peru filed an SEC shelf to issue up to $5bn in new debt securities. It last issued in the international markets in November 2010 when it sold $2.5bn in dollar and sol-denominated debt (Baa3/BBB minus) in a transaction that was led by Bank of America Merrill Lynch and Morgan Stanley. At the time, the sovereign raised $1bn in new 2050s that priced at 96.164 to yield 5.875%. It also raised $1.5bn equivalent through a retap of sol-denominated 7.84% Global 2020s, reopening them at 114.718 to yield 5.75%. The 5.625% 2050s have been trading at around 105-107 to yield 5.32% on the bid side.