#Peru #Lima #Exchange Offers #sovereign bonds

The Republic of Peru Announces Successful Bond Offers

On June 12, 2025, the Republic of Peru made an important announcement regarding its sovereign bonds. Following its previous communication regarding a structured initiative to exchange and repurchase outstanding sovereign bonds, including Global Depositary Notes (GDNs), Peru confirmed the completion of these Offers, which expired on June 11, 2025.

Overview of the Offers

The announced Offers consisted of two primary actions: 1) the exchange of certain existing sovereign bonds for new Sol-denominated bonds maturing in 2035 and 2) a cash tender offer to purchase existing bonds. These transactions are designed to optimize Peru's debt profile and improve its financial standing in international markets. The terms, conditions, and specifics of the Offers detailed in the Exchange and Tender Offering Memorandum dated June 5, 2025, guided this financial strategy.

The types of bonds involved in these Offers included:

• - 8.200% Bonos Soberanos due 2026
• - 6.350% Bonos Soberanos due 2028
• - 5.940% Bonos Soberanos due 2029
• - 6.950% Bonos Soberanos due 2031

Peru received significant interest, resulting in substantial aggregate principal amounts tendered and successfully accepted in both the exchange and cash offers. For example, the 6.350% bonos due 2028 saw an impressive S/2,299,075,000 tendered in the exchange segment alone.

Financial Implications

Peru's strategy appears to be a proactive approach to managing its debt. By offering new bonds due in 2035, the country aims to extend its debt maturity profile while offering an attractive exchange consideration. The aggregate principal amounts accepted in the Offers underscore the market's confidence in Peru's economic stability and recovery trajectory.

The Exchange Consideration was quoted using a fixed currency exchange rate of S/3.636 per 1.00 U.S. Dollar, reflecting calculated financial terms that facilitate the process for investors. The settlement date is anticipated for June 17, 2025, providing a timeline for the execution of these newly structured financial instruments.

Regulatory Framework

It's important to note that these Offers are subject to specific regulations. The new bonds will not be registered under the U.S. Securities Act, implying they are exclusively available to qualified institutional buyers or non-U.S. investors engaging in offshore transactions. This points to a conscientious effort by Peru to navigate the complexities of international finance law.

Peru is dedicated to complying with all legal and regulatory requirements, making the process transparent to investors and stakeholders. Additionally, it has emphasized that the Offers are only valid in jurisdictions where such transactions are legally permissible.

Conclusion

The completion of these exchange and tender offers is a pivotal milestone for the Republic of Peru as it endeavors to enhance its fiscal position and bolster investor confidence. By revitalizing its bond offerings and extending maturities, Peru is poised for a stronger financial future. As the country continues to implement strategic economic policies, it aims to foster growth and stability in the long term. This recent development marks an essential step in Peru's ongoing efforts to navigate the complexities of global finance while maintaining robust relationships with its investors.