Bloomberg News

Bond Yields Fall Most Since June After Fed Comments: Lima Mover

January 26, 2012

Jan. 26 (Bloomberg) -- Peruvian bonds rose, pushing down yields the most in seven months, after the U.S. Federal Reserve said it plans to keep borrowing cheap through 2014, fueling demand for higher-yielding emerging-market assets.

The yield on Peru’s 6.95 percent sol-denominated bond due August 2031 dropped 27 basis points, or 0.27 percentage point, to 6.54 percent, according to Citigroup Inc.’s local unit. That’s the biggest one-day drop since June 7. The securities price rose 2.94 centimos to 104.58 cents per dollar.

The Fed said yesterday it sees “exceptionally low” interest rates through 2014. The yield on Peru’s bonds rose to a three-month high yesterday after Peru’s government sold more of the bonds as part of its first overseas offering since 2010.

“The issue clearly had an impact on yields yesterday,” said Roberto Melzi, a Latin America Strategist at Barclays Capital Inc. in New York. “Today, given the Fed’s signal, people are taking the opportunity to add Peruvian bonds at those cheaper levels.”

The Andean nation sold $600 million of the bonds due in 2031 and $500 million more of its dollar-denominated securities maturing in 2050. The sale drew bids totaling $6.4 billion, according to the finance ministry.

The sol advanced 0.1 percent to 2.6920 per U.S. dollar, from 2.6940 yesterday.

--Editors: James Attwood, Lester Pimentel

To contact the reporter on this story: John Quigley in Lima at

To contact the editor responsible for this story: David Papadopoulos at

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