After a 74-year absence, Peru returned to the international capital markets in February 2002 with a 10-year, $1.42 billion bond. The historic issue signaled a break with the past for a country that traditionally had relied on multilateral financing to make up budget shortfalls.
Pedro-Pablo Kuczynski, Peru's finance minister at the time, organized and executed the issue. Part new cash and part Brady swap, the transaction allowed Peru to issue $500 million in new bonds and exchange $1.21 billion of its outstanding Brady bonds for a $930 million, new global bond. The issue gives Peru a liquid benchmark bond and qualifies for inclusion in JP Morgan's EMBI+ index, which tracks the emerging markets' most liquid and tradable bonds. Investors met Peru's return to the international capital markets with...
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