Peru prepares new century bond after authorizing $4 billion in debt to deal with coronavirus impact

By Marco Aquino

LIMA, Nov 23 (Reuters) – Peru is preparing a centenary dollar bond after authorizing the issuance of up to $4 billion in debt to help contain the country’s coronavirus outbreak and mitigate its economic impact, government and market sources said on Monday.

Refinitiv’s financial service IFR earlier announced that the world’s second-largest copper producer is preparing to issue new dollar debt in three tranches, which will include the 100-year bond.

BBVA, Citigroup Inc, Itau, Goldman Sachs and Morgan Stanley will manage the issue and have set initial guidelines for US Treasuries plus 135 basis points for new 12-year paper; 160 basis points for a 40-year bond and around 200 for a 100-year bond, according to an SEC filing cited by IFR.

Peru’s Ministry of Economy and Finance issued a decree on Sunday authorizing the issuance of bonds equivalent to $4 billion.

The debt issuance comes days after interim President Francisco Sagasti told Reuters that Peru planned to issue short-term bonds to fill the Andean nation’s “very large” budget deficit.

“When you have room to go into debt and you’re in a crisis, that’s what you have to do,” Sagasti said. (Reporting by Marco Aquino in Lima Writing by Dave Sherwood Editing by Matthew Lewis)

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