Bloomberg News

Peru Dollar Bond Yields Rise as Italian Debt Woes Sap Demand

November 15, 2011

Nov. 15 (Bloomberg) -- Peru’s benchmark dollar bonds fell, pushing up yields for the fifth day in six, as demand for emerging-market assets dropped amid concern Europe’s debt crisis will intensify.

The yield on the nation’s 6.55 percent dollar-denominated bond due March 2037 rose one basis point, or 0.01 percentage point, to 4.72 percent at 4:46 p.m. Lima time. The security’s price fell 0.20 cent to 126.93 cents per dollar.

Pressure increased on Italian prime minister designate Mario Monti to announce his cabinet after a retreat in Italian bonds sent the extra yield investors demand to own the country’s debt over benchmark German bunds to a record. The yield on Italy’s 10-year bond exceeded the 7 percent threshold that prompted Greece, Ireland and Portugal to seek financial aid.

“The effects of turmoil and ongoing uncertainty coming out of Europe” curbed investor appetite for Peruvian bonds, said Kathryn Rooney Vera, an emerging markets analyst at Bulltick Capital Markets in Miami.

Peru’s sol was little changed at 2.7055 per U.S. dollar, from 2.7067 yesterday.

--Editor: 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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