Bloomberg News

Peruvian Bond Yields Fall as Europe Debt Optimism Spurs Demand

October 19, 2011

Oct. 19 (Bloomberg) -- Peruvian bonds rose, pushing down yields for the first time this week, as optimism the European Union will expand a bailout fund and stem the region’s debt turmoil spurred demand for higher yielding, emerging-market assets.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 fell three basis points, or 0.03 percentage point, to 5.73 percent, according to prices compiled by Bloomberg.

European stocks gained after the Guardian newspaper reported yesterday that German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to boost the European Financial Stability Facility to 2 trillion euros ($2.75 trillion) from 440 billion euros.

“Risk sentiment has been the main driver for bond prices as of late,” said Daniel Chodos, an emerging markets strategist at Credit Suisse Securities in New York.

The sol was little changed at 2.7235 per U.S. dollar, from 2.7225 yesterday.

The extra yield investors demand to own the Andean country’s bonds instead of U.S. Treasuries declined three basis points to 216 at 4:36 p.m. in New York, according to JPMorgan Chase & Co.

--Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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