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

11/23/2020 | 12:23pm EST

LIMA, Nov 23 (Reuters) - Peru is preparing a century bond in dollars after authorizing the issuance of debt of up to $4 billion to help rein in the country's coronavirus outbreak and soften its economic impact, the government and market sources said on Monday.

Refinitiv's IFR financial service reported earlier that the world's No. 2 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 in the area of U.S. Treasury bonds plus 135 basis points for a new 12-year paper; of 160 basis points for a 40-year bond and about 200 for a 100-year, according to a document filed to the SEC and cited by IFR.

Peru's Ministry of Economy and Finance published 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 bonds in the near term to service the Andean nation's "very high" fiscal deficit.

"When you have room to get into debt and you are in crisis, that's what you have to do," Sagasti said. (Reporting by Marco Aquino in Lima Writing by Dave Sherwood Editing by Matthew Lewis)

© Reuters 2020
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BANCO BILBAO VIZCAYA ARGENTARIA, S.A. -0.40% 4.035 Delayed Quote.0.00%
CITIGROUP INC. -2.18% 61.87 Delayed Quote.0.34%
THE GOLDMAN SACHS GROUP, INC. -0.38% 289.37 Delayed Quote.10.15%
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