In the Belly of the Curve

Mar 1, 2002

Peru ended its 74-year absence from the international bond markets in February when it issued $1.43 billion worth of 10-year global bonds in a well-received deal that included a Brady exchange. The issue made the most of improving sentiment towards Peru, where the government of President Alejandro Toledo has shown signs of hitting its stride after a difficult and contentious first six months in office.
Prior to the deal, both Moody's and Standard&Poor's raised their outlook for Peru and the government also concluded a $316 million stand-by agreement with the International Monetary Fund.

The BB-/Ba3 rated sovereign was keen to go to the markets after its Brady spreads narrowed to historic lows of well below 500 basis points. Pedro-Pablo Kuczynski, the former investment banker now at the helm of the country's economy and finance ministry, also made the case that Peru needed "to diversify its credit sources" away from...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management