The Republic of Peru tapped the international bond market on Monday for the first time in more than a year, raising $4.5 billion in a two-part sale of sustainable notes.
The sovereign issued $2.5 billion worth of 12-year notes and $2 billion in 30-year notes, according to a source familiar with the transaction.
The government priced the 6.06% 2038 notes at 99,899 to yield 6.072%, or 118 basis points over US Treasury bonds, after opening the initial price talk in the 160 bps area. And it sold the 6.45% 2056 notes at 99.527 to yield 6.486%, or 120 bps over USTs, after opening the bidding at around 160 bps, the source said.
Citi, Crédit Agricole, Deutsche Bank and Santander were bookrunners on the deal.
The sovereign will use some of the proceeds to finance green and social projects and for general budgetary purposes, according to a prospectus. It also intends to issue additional 2038s as part of an exchange offer launched on Tuesday.
Peru is offering to swap a portion of the $3.71 billion in principal outstanding on three series of global bonds due between 2027 and 2031, the government said Monday in a press release. It offered to pay bondholders $1,000 for each note tendered by November 17.
The issuance follows a drop in US Treasury yields this month after oil prices fell and the Democratic sweep in the midterm elections fueled investor expectations of a potential slowdown in spending—and borrowing—by US tech firms.