Peru's Economy and Finance Ministry (MEF) on Monday announced the successful launch of a S/10 billion (around US$3.08 billion) 2032 Sol-denominated sovereign bond international offering, the institution informed.
Proceeds of the bond sale will be used to settle Dollar-, Euro- and Yen-denominated debt. Thus, it will not entail further debt.
Placement of the new 2032 Sovereign Bond —priced with a 6.15% coupon— constitutes a new 15-year benchmark in Peru's local currency yield curve.
MEF underlined the issue is in line with its public debt "solarization" (conversion into Sol) strategy, and is thus bound to increase the said yield curve liquidity.
In this sense, Economy and Finance Minister Fernando Zavala explained the idea behind such conversion is "to save the State money, as it reduces interest rates, solarizing the public debt and the economy as a whole."
It is worth noting this is the first transaction in Peruvian history to be settled through the international platform Euroclear, following top-tier international standards used by bond issuers worldwide.
"We have also opened the door for the private sector to use the Euroclear platform and get access to Sol-denominated financing in the international market," the government official added.
US$10 bn demand
The securities transaction also marks the Peruvian Government's successful return to the international capital market with a local-currency-denominated placement.
Demand for the said issue stood at approximately S/34 billion (about US$10.47 billion), a proof of local —and international— investors' confidence in the Inca country’s economy, government team and reform plan.