The Government of Peru has successfully carried out a placement of 'green' bonds for a total of 4.5 billion dollars (4.058 billion euros), with maturities of 12 and 30 years and coupons of 6.06% and 6.45%, respectively, becoming the largest dollar issuance carried out by the Andean country.
The operation had strong backing from international markets, with requests recorded above 21.0 billion dollars (18.935 billion euros). This volume, the highest since the health crisis, has caused the oversubscription to exceed the amount initially offered by more than seven times.
According to the information released by the Ministry of Economy and Finance (MEF) through the official platform 'El Peruano', the placement involved more than 320 investor accounts both local and from abroad, which made it possible to "significantly optimize the issuance conditions in favor of Peru".
The strong investor appetite allowed the initial spread on debt at 12 and 30 years to narrow notably, which started at 160 basis points over U.S. Treasury bonds, down to 42 basis points in the 12-year tranche and 40 basis points in the 30-year tranche. As a result, a negative new-issue premium was achieved on the 12-year bond and a zero premium on the 30-year bond.
The 4.5 billion dollars captured will be directed to projects for climate change adaptation, management of risks linked to natural disasters, and development of infrastructure resilient to extreme weather events, such as 'El Niño'.
In addition, Peru has launched an exchange offer for global dollar bonds maturing in 2027, 2030, and 2031 for new securities with amortization in 2038, with the intention of improving the profile of sovereign debt and strengthening the long-term outlook for the foreign-currency yield curve.
"Peru continues to be a country that generates trust in international financial markets and maintains intact its capacity to access long-term financing on competitive terms. This is excellent news for the country", the Peruvian Minister of Economy and Finance, Elmer Cuba, said.