Peru Secures USD 5.8 Billion Through Sovereign Bond Issuance

On July 9, 2025, the Republic of Peru successfully completed a remarkable bond issuance totaling USD 5.8 billion, marking a significant move in the country’s financial strategy. This issuance included approximately S/10 billion (USD 2.8 billion) in Soles-denominated sovereign bonds, alongside USD 3 billion in registered U.S. dollar-denominated bonds. The New York office of Baker McKenzie represented the Republic in these transactions, which also involved a comprehensive liability management strategy aimed at optimizing the country’s debt profile.

According to Mike Fitzgerald, a partner at Baker McKenzie, “This bond issuance is a critical step for Peru in extending its debt maturity profile and enhancing its financial stability amid global economic fluctuations.” The Soles-denominated bonds offered included a 6.850% interest rate with a maturity date set for 2035. Concurrently, the Republic reached out to holders of various existing sovereign bonds, providing them with options to exchange their current holdings for the newly issued bonds or to accept cash offers.

The response from investors was robust, with approximately S/9.4 billion (USD 2.6 billion) in existing sovereign bonds tendered for exchange and about S/2.8 billion (USD 770 million) accepted for cash. However, due to the overwhelming interest and tender amounts exceeding the maximum limits established by the Republic, proration was applied to the accepted tenders.

Simultaneously, the Republic issued USD 1.6 billion in 5.500% U.S. dollar-denominated global bonds due in 2036 and USD 1.4 billion in 6.200% U.S. dollar-denominated global bonds, which were also registered with the U.S. Securities and Exchange Commission. This initiative not only reflects the Republic’s proactive approach to managing its liabilities but also showcases its commitment to maintaining investor confidence.

The liability management transactions for both the Soles and U.S. dollar-denominated bonds included offers for holders of five series of existing U.S. dollar-denominated bonds and two series of Euro-denominated bonds, further demonstrating a strategic effort to streamline Peru's debt obligations. The aggregate principal amounts of the bonds validly tendered in these transactions reached approximately USD 516.7 million and USD 433.9 million for the U.S. dollar-denominated bonds, with EUR 229.8 million for the Euro-denominated bonds.

The underwriters for these transactions included major financial institutions such as BNP Paribas, Citigroup, HSBC, and Santander, highlighting the significant interest from leading banks in Peru's financial maneuvers. These transactions are viewed as essential for the country’s fiscal health, providing necessary capital while encouraging sustainable economic growth.

Dr. Laura Mendoza, an economist at the University of Lima, commented, “This bond issuance is a pivotal moment that could enhance Peru's credit rating and financial outlook. It positions the country favorably in the eyes of international investors.”

The successful execution of these bond offerings not only consolidates Peru’s financial foundation but also sets a precedent for future capital market activities in the region. As the global economy continues to face uncertainties, Peru’s strategic financial maneuvers exemplify an adept approach to managing public debt and ensuring long-term economic resilience. As the nation moves forward, the implications of this issuance may well influence Peru's standing in international financial markets, potentially attracting increased foreign investment and fostering economic stability.