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Peru Initiates Exchange and Tender Offers for Eligible Bonds

On June 25, 2025, the Republic of Peru kickstarted an important financial initiative, announcing offers for the exchange of certain outstanding U.S. dollar-denominated bonds. This initiative also includes an opportunity for investors to sell their eligible bonds for cash, representing a strategic move to manage the country's debt profile effectively.

Overview of the Offers

The announced offers comprise two primary components:

1. Exchange of USD-denominated Bonds: Peru is allowing bondholders to exchange specific outstanding bonds for a new series of U.S. dollar-denominated global bonds that are set to mature in 2036. This exchange is designed to improve the maturity profile of Peru's debt, making it more manageable in the long run.

2. Cash Tender Offers: In addition to the bond exchanges, Peru is offering cash purchases for certain eligible bonds. The eligible bonds include both U.S. dollar-denominated and Euro-denominated bonds, giving investors multiple avenues to monetize their holdings. This cash tender offer is set to provide liquidity for bondholders, making it an attractive option for those who seek immediate cash instead of longer-term securities.

Details of the Eligible Bonds

The exchange offers will apply to various series of eligible USD bonds, including:

• - 7.350% bonds due 2025 - with an outstanding principal amount of approximately US$424.6 million.
• - 2.392% bonds due 2026 - approximately US$346.2 million.
• - 4.125% bonds due 2027 - approximately US$617.7 million.
• - 2.844% bonds due 2030 - around US$645.4 million.
• - 2.783% bonds due 2031 - about US$3.2 billion.

The cash tender offers will also focus on Euro-denominated bonds, including:

• - 2.750% bonds due 2026 - approximately €844.7 million.
• - 3.750% bonds due 2030 - about €935 million.

Holders of these eligible bonds who participate in the offers will receive accrued interest payments in addition to the exchange or purchase amounts.

Timeline and Conditions of the Offers

The offers will commence at approximately 8:00 a.m. New York City time on June 25, 2025, and will expire at 5:00 p.m. New York City time on July 1, 2025, unless Peru decides to extend or terminate the offers earlier. Each exchange and cash tender offer is an independent endeavor and is not contingent upon a minimum amount of participation. This means that bondholders can choose their level of involvement based on their financial strategies.

Peru reserves the right to reject some or all eligible bonds tendered in response to the offers, thereby allowing for proration at its discretion. This proactive strategy may help Peru stabilize and manage its debt while providing attractive alternatives to bondholders.

Participation Requirements

Investors looking to participate in these offers must be direct participants in recognized clearing systems like the Depository Trust Company (DTC), Euroclear, or Clearstream Banking. Those interested in tendering their eligible bonds must comply with the established procedures of these clearing systems to ensure a smooth transaction process.

As a reminder, these offers are limited to jurisdictions where such exchanges or purchases are authorized by law. Investors located in jurisdictions where these offers are not permitted should inform themselves of local laws applicable to such transactions.

Conclusion

Peru's recent announcement reflects its commitment to effectively manage its financial obligations while providing flexibility for bondholders. By offering both exchange and cash options, the country is aiming to improve its debt maturity structure and provide immediate liquidity options for investors. This financial maneuver not only signals Peru's proactive approach to its sovereign debt management but also showcases the resilience of its financial markets amidst evolving global economic conditions.

For further details, bondholders are encouraged to refer to the official prospectus or consult their financial advisers to navigate the intricacies of these offers appropriately.