Republic of Peru – March 2021

NAME OF THE CLIENT:

Republic of Peru

DEAL DESCRIPTION:

We have advised the Republic of Peru in an international issuance of sovereign bonds, denominated in U.S. dollars and Euros, which is part of the external debt operations authorized by the Congress of the Republic of Peru in order to finance the budget of the Public Sector of Peru for the year 2021.

This issuance, which has allowed the placement of sovereign bonds in the international market up to an equivalent of US$ 5 billion in total, is historically the largest issuance that the Republic of Peru has carried out, exceeding by 25% the issuance of sovereign bonds that Peru recently made in November 2020 (US$ 4 billion).

Among the complexities that this transaction presented, we can highlight a sophisticated structure oriented to raise funds in various markets at highly competitive rates for Peru. In this sense, as one of its main aspects, the transaction included the issuance of bonds in two different currencies (US Dollars and Euros), to be placed in the North American and in European markets, respectively.

In turn, the issuance in US dollars comprised three tranches based on the placement value, terms and rates. It should be noted that in the operation in US dollars, bonds for US$ 4 billion were offered and a demand for US$ 10 billion was asked, it had the participation of more than 200 investors (from North America, Asia and Europe) and was highly competitive for transactions of this nature.

On the other hand, in the issuance in Euros, bonds were offered for € 825 million and there was a demand for more than double the amount offered. The placement rate was 1.25%, the lowest in foreign currency registered by the Republic of Peru in an international debt issuance, according to what was reported by the Ministry of Economy and Finance. More than 100 investors with high-quality accounts from various markets around the world participated.

From a financial point of view, Peru was advised by three of the world’s leading investment banks, such as Bank of America, JP Morgan and Morgan Stanley. Likewise, The Bank of New York Mellon acted as Registrar, Transfer and Payment Agent as well as a Listing Agent in Luxembourg and also as a Paying Agent in London.

 

LAWYERS INVOLVED:

Counsel to Issuer: Hernández & Cía. Abogados

Partners: Jose Manuel Abastos, Juan Luis Hernández

Senior Associate: Erick Calla

Associates: Andrés Marcos, María Alejandra Justo

Paul Hastings LLP, as International Counsel for the Republic of Peru.

 

Shearman & Sterling LLP, as International Counsel for Underwriters.

 

Payet, Rey, Cauvi, Perez Abogados, as Local Counsel for Underwriters.

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