EXCLUSIVE: Peru focuses on liability management operations

EXCLUSIVE: Peru focuses on liability management operations

Bonds Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Event Exclusives

Peru plans to emphasize liability management exercises in its approach to international debt markets this year and could explore an operation in the euro market, said José Olivares, the head of financial markets management at the Ministry of Economy and Finance (MEF). 

Olivares, speaking at LatinFinance's 5th Latin America Capital Markets Summit in New York, said Peru has no immediate plans to sell new debt, despite a flurry of big-ticket bond sales this month by sovereign issuers, including Mexico, Chile and Colombia

"We have been very active in recent years," Olivares said. "Now we're looking at liability management exercises."

Peru last tapped the global credit markets in November last year, obtaining record yields for PEN10 billion ($2.99 billion) in local-currency bonds. At the same time, it reopened its 2034 notes at 4.95%, or 45 basis points below the previous record low yield of 5.4% when it first printed the bonds in June 2019. The sovereign issuer also sold new 2040 notes at 5.35%

The transaction was one of several bond sales over the last year that saw Peru obtain increasingly record-low rates and issue more global bonds in local currency.

Looking ahead, the country may return to the euro-denominated bond market in the medium term as it focuses on liability management exercises.

"We may do something in euros," he said. "Each year it gets harder to buy back our global bonds. They are very expensive in dollars and euros. It will depend on market conditions."

 

PHOTO: José Olivares, the head of financial markets management at the Ministry of Economy and Finance of Peru, speaking on the sidelines of the LatinFinance 5th Latin America Capital Markets Summit in New York, January 29, 2020. Photo by Leandro Justen