Bloomberg News

Peru Dollar Bonds Fall on Bets Europe Measures Won’t Stem Crisis

December 09, 2011

Dec. 9 (Bloomberg) -- Peru’s dollar bonds fell, pushing up yields the most in a week, as European leaders’ plan for closer fiscal unity failed to allay concern Italy and Spain may succumb to the region’s debt crisis.

The yield on the nation’s benchmark 6.55 percent dollar- denominated bond due March 2037 climbed two basis points, or 0.02 percentage point, to 4.87 percent at 1:38 p.m. in New York, the biggest gain since Nov. 29. The bond’s price fell 0.37 cent to 124.24 cents per dollar.

European leaders holding all-night talks in Brussels added 200 billion euros ($267 billion) to their crisis-fighting capacity and toughened anti-deficit rules. Though ECB President Mario Draghi hailed the agreement, he didn’t signal the bank will expand purchases of Italian and Spanish bonds, which disappointed investors, said Enrique Alvarez, head of Latin America fixed-income research at IdeaGlobal in New York.

“The Europeans went the route of fiscal unity but they did little as to clarify how the more stricken credits are going to finance in the early part of 2012,” Alvarez said. “That creates a risk aversion factor.”

The sol was little changed at 2.6950 per U.S. dollar, compared with 2.6955 on Dec. 7, according to Deutsche Bank AG’s local unit.

--Editors: James Attwood, Brendan Walsh

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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