International financial markets trust Peru's economic management capacity

Aerial view of Lima

Aerial view of Lima's financial center. Photo: ANDINA/Juan Carlos Lezama

17:01 | Lima, Nov. 25.

Peru's issuance of bonds equivalent to US$4 billion was successful because of the confidence that President Francisco Sagasti inspires in international markets, Universidad del Pacifico Finance Professor Guillermo Runciman affirmed on Wednesday.

"Economic agents trust Peru's economic management capacity. The successful issuance is in line with the international financial system's expectations," he told Andina news agency.

In this sense, he said that the last political changes boosted the issuance of Peruvian sovereign bonds. 

Attractive for investors

Runciman said that another attractive aspect for investors is the profitability of these bonds.

"In this case, if they invest in buying bonds from the U.S. Treasury, they will receive an interest rate of 0.85%, but if they buy Peruvian bonds, they will get a rate of 1.85% now," he explained.

Therefore, he commented that the profitability offered to the bond's buyer is higher. "That is very positive for investors," he commented.

Runciman explained that the notes were issued in three tranches, including a 12-year bond, a second one due in 40 years, and a 101-year bond.

Last Monday, Peru issued US$4 billion in bonds in the international market, including securities coming due in 101 years, for the first time in history, in order to get resources to combat the COVID-19 pandemic and underpin the economic reactivation in the country.


Published: 11/25/2020
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